Petroplus major oil refiner files for insolvency

PanARMENIAN.Net - Swiss-based Petroplus Holdings, Europe's largest independent oil refiner, said Tuesday, January 24 that it is filing for insolvency after failing to reach an agreement with its lenders on its $1.75 billion credit line.

Petroplus said the lenders have filed notices of acceleration, effectively placing the company in default, and have appointed a receiver for the Swiss company's U.K. assets.

It is preparing to file for insolvency in Switzerland and in other countries where it has subsidiaries. The company has refineries in Switzerland, France, Belgium, Germany and England.

Petroplus, which reported a net loss of $413 million in the first nine months of last year, said last week it had decided to sell the facility in France and might do same with the Swiss and Belgian sites. Trading in the Petroplus shares had been suspended on Monday.

The company's troubles already have forced a halt to production at the Cressier refinery in northwest Switzerland, but that has not caused any disruption to the nation's fuel supplies.

In Britain, the Unite union said 1,000 jobs were at stake at Petroplus' Coryton refinery, which represents a tenth of Britain's refinery capacity and is a key supplier for the London area.

Employees were working at the refinery as normal but no shipments of refined products were being made, a condition imposed by the lenders, Margrave said.

Refinery profitability has been squeezed as operating expenses and the cost of crude oil rose faster than the value of the products, and the economic slowdown in Europe has added to the pressure.

A survey by energy consultancy Wood Mackenzie in 2010 found that 29 of 96 refineries in the European Union did not generate a positive net cash margin, The Associated Press reported.