Wed 27 May 2009 08:01

WFS eyes new acquisition opportunities - source


CEO says the company is looking at "opportunities to buy" in the marine, aviation and land fuel segments.



The Chief Executive of US-based fuels specialist World Fuel Services (WFS) is reported to have said that the company will continue to expand through acquisitions and that it is currently looking at new investment opportunities in the marine, aviation and land fuel segments.

In an interview with Dow Jones, WFS CEO Paul H. Stebbins [pictured] is quoted as saying "We certainly believe that in today's market, there are opportunities to buy."

The news follows the company's recent acquisition of UK-based marine and land based fuels provider Henty Oil last month.

Henty, based in Liverpool, with 2008 marine volume of over 250,000 metric tons, services the Irish Sea ports of Liverpool, Holyhead and Heysham. Henty's land segment, with 2008 volume of approximately 10 million gallons, provides fuel and gas oil to a broad range of customers throughout the United Kingdom.

Last month WFS also completed the acquisition of TGS Petroleum, Inc., a Chicago-based firm with 2008 volume of over 100 million gallons, which distributes gasoline and diesel fuel under long-term contracts to over 160 retail petroleum operators in the US.

Commenting on the bunker fuel segment, Stebbins is reported to have said that the fear of counterparty risks has made suppliers and buyers of marine fuel more "focused on who they are putting their business through than ever before," and that the company's small drop in sales volumes against industry expectations of between 20%-25% would indicate that WFS has increased its market share as a consequence.

"Counterparty risk is going to be an absolutely critical part of business strategy in the future. The days of easy liquidity, easy credit, easy leverage are gone," added Stebbins.

In regard to capital, Stebbins said WFS was currently sitting on around $400 million in cash and approximately $950 million in liquidity.

The company was reported earlier this month to have already granted between GBP30 million ($45 million) and GBP 40 million ($60 million) to Henty Oil in order to develop the business further.

"We will be looking to create small oil terminals around the UK, especially in Scotland and Ireland,” said Company President Paul Henty.

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