SUGAR LAND, Texas, March 27, 2020 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today provided updates on its previously announced AMAK share sale and purchase agreement, the Company's balance sheet and liquidity position, business and market outlook, and finally, COVID-19 operational impact and protective actions.
AMAK Share Sale and Purchase Agreement
Trecora has closed on a portion of the previously announced AMAK share sale. The Company has received additional gross proceeds of approximately $10 million associated with the share allocation to the Arab Mining Company, ARMICO.
Due to the unforeseen and systemic macroeconomic events that have had a worldwide impact, the deadline for closing the remaining AMAK share sale has been extended to September 28, 2020 at the request of the purchasers and with Trecora's approval.
As previously agreed, 50% of the purchasers' non-refundable deposit will be forfeited for all share sales with a closing date after March 31, 2020 and not apply to the sale price at closing.
Balance Sheet and Liquidity Position
As a precautionary measure during this period of uncertainty, and to ensure ample liquidity, we recently borrowed $20 million dollars on our revolver. Including the AMAK share sale proceeds, total consolidated cash is approximately $39 million, as of today.
Business and Market Outlook
Q1 2020 Specialty Petrochemicals demand remains solid. Results at TC will improve significantly due to both the operation of the hydrogenation unit and higher production in other custom processing activities.
As of today, certain end-uses tied to durable goods, such as synthetic rubber customers and the automotive sector, are showing some demand weakness heading into April. However, this appears to be offset by higher demand in the non-durable sectors such as polyethylene for packaging, expandable polystyrene for food service and hot-melt adhesives for home deliveries.
COVID-19 Operational Impact and Protective Actions
Pat Quarles, Trecora's President and Chief Executive Officer, stated "We have clearly entered a period of tremendous uncertainty due to the COVID-19 pandemic. We have taken steps both operationally and financially to make our Company more prepared. Our guiding principle is, and has always been, the protection of our people and the communities in which we work, as well as the overall integrity of our assets. We are following all CDC and WHO recommendations for the protection of all personnel at our sites. I want to also recognize the tremendous commitment of our people during this period. As an organization, we adopted social distancing behaviors early, executed the necessary changes to enable all possible job duties to be performed from home and rapidly identified and executed the necessary adjustments to support optimal productivity for all remote workers.
"Our products are essential to the critical infrastructure of our country during this time of crisis. This is acknowledged in the Cybersecurity and Infrastructure Security Agency's (CISA) Guidance on the Essential Critical Infrastructure Workforce as well the local regulatory and enforcement organizations in our communities. At this time, we have the necessary waivers for all critical employees to continue supporting our operations," Mr. Quarles concluded.