Lawfuel.com – The largest independent oil refiner in Europe, Petroplus, has decided to file for insolvency with the loss not only of jobs for its 2500 employees, but also the threat of impending gasoline shortages on the forecourts of European gas stations.
The WSJ reports on the involvency:
Swiss-based refiner Petroplus said Tuesday its board of directors plans to file for insolvency in Switzerland as soon as possible after talks with its lenders to unblock credit lines failed.
The company’s subsidiaries in other jurisdictions are taking similar steps, Petroplus said in a statement on its website. Petroplus’s priority is that operations are safely shut down and to preserve value for all stakeholders, the statement added.
“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,” Petroplus’s Chief Executive Jean-Paul Vettier said in the statement. “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.
Petroplus, which was already struggling with low margins and low demand for its products as a result of a general overcapacity and a slowing economy in Europe, has been battling for survival since banks froze credit lines in late December and early January.
The company has been negotiating with its banks—which include Société Générale, ING, BNP Paribas, Rabobank and Natixis—but its attempts at a refinancing eventually failed. Petroplus, which owns five refineries in Europe, had already idled three refineries located in France, Belgium and Switzerland.
Last week, the company said it was seeking buyers for the three idled plants and was “evaluating strategic alternatives” for the other two, which were operating at minimum levels since early January.
The failure of the negotiations with its banks constitutes “an event of default under the $1.75 billion aggregate principal amount of outstanding senior notes and convertible bonds of Petroplus Finance Ltd,” the statement said.
Petroplus employs 2,500 people and its five refineries have a total daily capacity of 667,000 barrels.