Switzerland’s Petroplus to file for insolvency

24 January 2012 10:29  [Source: ICIS news]

Coryton refinery in Essex, UK (source: Petroplus)LONDON (ICIS)--Petroplus will file for insolvency as soon as possible after negotiations with creditors to extend deadlines for loan repayments broke down, the Switzerland-based independent refiner said on Tuesday.

Shares in the company were suspended on Monday.

Petroplus had been negotiating with lenders to reopen credit lines needed to maintain operations and meet financial obligations, while also trying to arrange alternative financing and liquidity facilities.

However, the company said in a statement that negotiations had been unsuccessful and that lenders "have served notices of acceleration, commenced enforcement actions and appointed a receiver in respect of Petroplus Marketing AG’s assets in the UK".

“Such acceleration constitutes an event of default under the $1.75bn aggregate principal amount of outstanding senior notes and convertible bonds,” it added.

Petroplus said its primary goal was to ensure that operations were safely shut down and to preserve value for all stakeholders.

“It is unfortunate to have reached the point where the Executive Committee and Board of Directors have to inform our employees, shareholders, bondholders and other stakeholders about these circumstances,” said Petroplus CEO Jean-Paul Vettier.

“We have worked hard to avoid this outcome, but were ultimately not able to come to an agreement with our lenders to resolve these issues given the very tight and difficult European credit and refining markets,” he added.

On 12 January, Petroplus said it had reached a temporary agreement with its lenders that would provide financing to allow the company to maintain operations at its refineries at Coryton in the UK, and at Ingolstadt in Germany, which have throughput capacities of 220,000 bbl/day and 110,000 bbl/day, respectively.

Last week, Petroplus announced plans to sell its refinery in Petit Couronne, France, and was also evaluating the potential sale of its refineries in Switzerland and Belgium.

Petroplus earlier this month temporarily shut down its refineries at Cressier, Switzerland; Petit Couronne, France; and Antwerp, Belgium, after lenders froze some $1bn (€770m) in credit lines.

Its facility at Petit Couronne has a throughput capacity of 161,800 bbl/day; Antwerp has a throughput capacity of 107,500 bbl/day; and Cressier has a throughput capacity of 68,000 bbl/day.

The company said it would initiate a sales process for the Petit Couronne refinery and its related marketing business, after a consultation process with the works councils.

Ratings agency Standard & Poor’s (S&P) had cut its ratings for Petroplus, warning that the refiner could default soon, adding that its deal with lenders was only a “temporary solution”.

Additional reporting by Stefan Baumgarten

($1 = €0.77)

By: Franco Capaldo
+44 (0)20 8652 3214

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