A Sam Zell-backed oil refiner and charterer of Jones Act tonnage is planning to sponsor a blank-cheque company with targets in the energy sector.
Par Pacific Holdings is planning a special purpose acquisition company (Spac) focused on forging a mergers-and-acquisitions deal with a green tint, regulatory filings show.
The Spac "would be focused on identifying an acquisition target business involved in the North American energy value chain, specifically with a focus on sustainability and energy transition themes", the Texas-based energy company wrote in a recent filing.
The blank-cheque wish could see Par Pacific join a series of Spacs that have been floated in the US, with sometime shipping players Wilbur Ross, Akis Tsirigakis, George Syllantavos and Hans Mende on the growing list.
Those pursued by figures with shipping links are keeping their options open in which industry to spend the cash raised on the capital markets.
Shipping investment
One piece of the North American energy value chain in which Par Pacific has recently made significant investment is in shipping, to and from its refineries in Barbers Point, Hawaii, and at Tacoma in Washington state.
Par Pacific — successor of the former Par Petroleum and Delta Petroleum — owns refineries, fuel logistics, and retail fuel businesses in North America. In Hawaii, it also has been growing volumes at both ends of the chain and sourcing more crude from the US mainland.
Last year it committed over $50m to Jones Act shipping, with the long-term charter and upgrade of a veteran US-built product tanker, the 30,600-dwt Houston (built 1985).
The former US military replenishment auxiliary vessel is owned by unidentified private players and sails in the managed fleet of New Jersey-based tanker owner US Shipping.
Par Pacific took the ship on three-year charter and put it in shuttle service at the beginning of 2020 between Tacoma on the US Pacific north-west coast and Hawaii.
The company did not disclose a charter rate for the ship.
However, it told employees in a company newsletter that it had spent some $1.7m upgrading the 35-year-old vessel for its new trade. Par Pacific also said it "[would] spend about $50m over the next three years to operate the vessel", which equals about $46,000 per day.
Par Pacific subsidiary Par Hawaii's logistics network served its retail business that included eight terminals, three barges and 43 km of pipeline before it became a tanker operator.
Par Pacific disclosed in its annual report that a Zell-controlled fund and investment giant Blackrock respectively owned or had the right to acquire 24.2% and 13.9%, respectively, of shares as of the end of last year.
Making headlines
This makes Zell the company's biggest shareholder. Zell, who enjoys a high profile in the US for his real estate, media, and sports investments, is perhaps best known there as the man who bought Chicago Tribune owner Tribune Co for $8.2bn in 2007. The company filed for bankruptcy a year later.
Zell also has a history in US-flag shipping, including a stake in barge operator American Commercial Lines, which was recapitalised in 2020 without Zell's participation. He was also involved in now-defunct US domestic cruise venture American Classic Voyages, which went bust after the 11 September 2001 terror attacks in the US cancelled the leisure travel business.
Thanks largely to his real-estate investments, Zell's net worth was last year estimated by US business publication Forbes to be $4.7m.
A Zell Spac unrelated to Par Pacific, Equity Distribution Acquisition Corp (Edac), managed to raise $400m last year. In a Forbes interview in November, Zell expressed enthusiasm about the investment form that allows investors to give people money to take over unspecified projects.
"[It is ] one of the few things I’ve ever seen where Wall Street created a product that is beneficial for the investor," Zell said. "You can buy a Spac today and the only risk you’re taking is the opportunity cost of having that money put away for two years and you can’t get it."
He told the interviewer his Edac was "interested in the industrial space, manufacturing and distribution", unlike recent Spacs that have touted investment in "electric trucks and spaceship travel and those kind of things that can’t be measured".
