Bondholders Fear Worst At Petroplus
Investors holding notes with a nominal value of USD1.75bn against the UK subsidiary of Petroplus look increasingly unlikely to recover more than a small part of their principal after the administrator of the UK oil refinery business said it had not been able to sell the site after four months of trying, International Financing Review reported. "We have worked tirelessly to explore all feasible options for the refinery. We have had contact with over 100 possible investors and purchasers. We have been unable to reach a deal to date," said Steven Pearson, joint administrator and partner at PwC. The firm was appointed in late January and soon after secured an undisclosed three-month facility from a consortium made up of Petroplus co-founder Marcel van Poecke's AtlasInvest vehicle, a fund managed by US private equity KKR, and Morgan Stanley's commodities arm. This allowed the Coryton refinery in Essex to keep being supplied with crude oil and functioning whilst a buyer was sought for the 560-acre site as a going concern. Pearson added that this task was complicated because of weak trading conditions. "We have been losing money. Refining margins are currently low and the operation is loss making. We had to make a decision. We could have decided to give the refinery away but we have a statutory duty to maximise recoveries for creditors," he said. In addition, PwC had to decide whether to press ahead with a USD150m capital expenditure programme or embark on winding down operations and making the site safe, which will also prove costly. Read more.