Essex: Administrators at Coryton oil refinery seek $1bn deal with banks and creditors
ADMINISTRATORS at an Essex oil refinery are seeking a 1billion US dollar (�632.6million) deal with its banks and creditors to avoid closure.
The Coryton plant, which supplies 20% of fuel in London and the South East, was plunged into administration by its Swiss owner Petroplus earlier this year, prompting fears of up to 1,000 job losses.
Administrators PwC have since discovered that the refinery has debts of 2.3billion US dollars (�1.5billion) and are seeking around �632million in new finance, with the backing of creditors, to keep the company running in the medium term.
PwC said: “If a refinancing and restructuring is not possible, the administrators have informed creditors that they are also exploring a sale of the refinery and closure as alternatives.”
PwC said the oil refinery at Coryton is held at a book value of 1.3 billion US dollars (�822 million). The administrator said it planned to hold two meetings with creditors to outline the current position of the company, its options and intentions going forward on March 12 and March 21.
Last month, a consortium of financiers reached an agreement with the administrators that ensured Coryton would be able to refine oil at the plant until mid-May.
Normally, Coryton would own the oil it refines but the temporary deal saw the plant’s services effectively hired out by the consortium, who will supply their own oil. The deal, involving Morgan Stanley bank and private equity firms KKR Asset Management and AtlasInvest, allowed work to continue and gave administrators extra time to look for a buyer or seek a refinancing.
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PwC is also dealing with the administration of two other locations - an oil storage site in Teesside and a research and development site in Swansea.
The administrators previously said Petroplus had suffered as a result of “low refining margins and high restructuring costs” while the economic downturn in Europe has hit demand for transport fuels and competition has grown from refineries in Asia.
Petroplus reported a net loss of 413 million US dollars (�265 million) in the first nine months of last year, while in December its banks withdrew a 1.05 billion US dollar (�675 million) portion of its 2.01 billion US dollar (�1.29 billion) credit facility.
