CALGARY — Fuel retailer Parkland Corp. said Thursday the 157 Canadian fuel and convenience store locations it has put up for sale are generating a great deal of interest from prospective buyers.
The Calgary-based company announced earlier this year that it is aiming to divest the stores as part of its efforts to optimize its network.
The locations for sale include ones operated under the Chevron, Ultramar, Pioneer and FasGas brands as well as the On the Run convenience store banner.
Most are in Quebec and Ontario, with the balance in Alberta, British Columbia, Manitoba and Saskatchewan.
“There’s a lot of interest from individuals who want to buy a site, become a dealer, as well as buyers who want potentially to have multiple sites,” said Parkland chief financial officer Marcel Teunissen, in a conference call with analysts to discuss the company’s first-quarter financial results Thursday.
The sale of the gas station locations is part of Parkland’s broader goal to divest $500 million in non-core assets by the end of 2025.
On Thursday, Teunissen said the company is making good progress. Of the $400 million in assets that the company has already identified as potential divestitures, a significant proportion has already been sold or is in advanced stages of negotiation.
“And the remaining part of all that is going to be driven by the 157 retail sites that we actually have put in market,” Teunissen said.
“We have identified sites where the value of real estate is actually bigger than the value it has for us to run those sites. So that’s what we’re trying to monetize, and reinvest that money into businesses or locations that actually bring better returns for us.”
Parkland is looking to divest assets as part of an ongoing plan to improve returns to shareholders in the wake of a period of significant acquisitions.
But the company is facing calls to take more drastic action to improve its performance. Both U.S.-based activist investor Engine Capital LP, as well as Parkland’s largest shareholder Simpson Oil Ltd., have called on Parkland to conduct a review of strategic alternatives — including a possible sale of the company.
Parkland has said such a review is unnecessary and does not consider the best interests of the majority of its shareholders.
On Thursday, Parkland CEO Bob Espey said there is no update on the situation with either Engine Capital or Simpson Oil.
RBC Capital Markets analyst Luke Davis said the ongoing strife overshadows Parkland’s financial results, which were announced after the close of markets Wednesday.
“We believe the disagreement between management and its largest shareholder, Simpson Oil, remains a key overhang on the stock given heightened uncertainty,” Davis wrote in a note to clients.
“While we do not expect Parkland’s strategy and capital allocation framework to shift materially at this point, we believe any negotiation will likely require some concessions.”
Parkland posted a net loss of $5 million in its first quarter as its financial results took a hit due to an unplanned shutdown at its Burnaby refinery.
The Calgary-headquartered company said that compares to earnings of $77 million a year earlier.
On an adjusted basis, the company said it earned $327 million, a decrease of 17 per cent compared with the first quarter of 2023.
The unplanned shutdown of Parkland’s Burnaby, B.C. refinery began in January due to extreme cold weather and was extended by “technical issues” encountered when the company tried to restart the facility.
The refinery returned to normal operations on March 29.
This report by The Canadian Press was first published May 2, 2024.
Companies in this story: (TSX:PKI)
Amanda Stephenson, The Canadian Press
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