The administrators of Coryton refinery owner Petroplus have told creditors that if refinancing and restructuring is not possible, a sale of the Essex refinery and closure are being explored as alternatives.
In a proposal to the company’s creditors, the administrators have set out the actions they have taken to date and described how they are seeking to restructure the company.
The report identifies that the company has more than $2.3bn of creditors, including $1.75bn in relation to guarantees of four public note issues by other companies in the Petroplus group. The company’s assets include the oil refinery at Coryton, held at a book value of $1.3bn and approximately $250m of accounts receivable, mainly from other Petroplus companies across Europe, which are also in insolvency proceedings.
Two meetings have been announced at which the joint administrators will outline the current position of the company, its options and intentions going forward. The first meeting, with the holders of $1.75bn of convertible bonds and senior notes is to be held on 12 March 2012, and the second meeting, for all the creditors of Petroplus will take place on 21 March.
Steven Pearson, joint administrator and Price Waterhouse Cooper partner, said: “Significant progress has been made since our appointment in creating short-term stability at the refinery. We have now gained a comprehensive understanding of the financial position of the company. To continue operations at the refinery in the medium-term the company will need some $1bn of new financing and will need the support of its creditors as part of a wide-reaching financial and operational restructuring.
“At the upcoming meetings PRML’s creditors will get the opportunity to understand the challenges associated with refinancing and restructuring the company, together with the other options being explored.”