CorEnergy Infrastructure Trust has sold its Portland Terminal Facility and its remaining interest in the Joliet Terminal to Zenith Energy Terminals Holdings for an aggregate consideration of $61 million.
Pursuant to CorEnergy’s lease agreement with its tenant, Zenith had the option, effective in February 2017, to purchase the terminal. Following an asset and market review, CorEnergy and Zenith entered a negotiated sale. The Portland Terminal was purchased by CorEnergy in January 2014 for $42 million, with the company investing an additional $10 million for improvements in the asset. Zenith became the parent company of the tenant when it purchased the original tenant, a subsidiary of Arc Logistics, in December 2017.
CorEnergy also sold its remaining interests in Joliet, the owner of a multi-purpose storage facility in Illinois. As of Sept. 30, 2018, CorEnergy valued these interests at approximately $1.2 million, and CorEnergy was not anticipating receiving material distributions from the investment in the near term.
“The rent payments CorEnergy received on the Portland Terminal over the last five years, as well as the gain on sale from this transaction, have provided a total annual return within CorEnergy’s low to mid-teens target range for this type of asset,” said Dave Schulte, CorEnergy’s CEO and president. “With the funds we are receiving, CorEnergy expects to invest in another asset in 2019. We remain committed to our underwriting disciplines and also have the flexibility to deleverage to further strengthen our capital structure. We do not expect the sale of Portland to affect CorEnergy’s ability to maintain its current quarterly dividend of $0.75 per share.”
