Petroplus UK administrator aims to sell Coryton refinery within month


LONDON -- The administrator of Petroplus Holdings’ UK subsidiaries aims to reach a deal to sell the Coryton refinery in England within 30 days, a joint administrator and partner at PricewaterhouseCoopers said Tuesday.

PWC's Steven Pearson said that prospective buyers had complied with the April 2 deadline to submit their bids for the 220,000 bpd refinery.

He refused to provide further details, saying it could undermine the process.

"A couple of potential buyers and investors are now in the due-diligence stage," said Unite trade union regional industrial organizer Russ Ball.

Reaching the deal within 30 days is realistic, because the involved parties are willing for it to happen, "but very challenging," Pearson said.

"In a couple of weeks we'll know where we are," said Ball.

The administrator said last month that Coryton's book value was $1.3 billion. David Epstein, sell-side credit analyst and managing director at U.S.-based CRT Capital Group LLC, in February estimated the ongoing business value of Coryton's property, plant and equipment, excluding oil inventories and liabilities, at around $625 million.

Before Petroplus lost access to all its credit lines and then filed for insolvency in January, Coryton was supplying around 10% of the UK's fuel market. BP, Royal Dutch Shell and Valero Energy were among the refinery's main customers.

"Coryton is [now] running pretty close to [full] capacity," Pearson said.

The administrator also said that striking a long-term deal, rather than extending the tolling agreement with Morgan Stanley Capital Group Inc., KKR Asset Management LLC, and AtlasInvest beyond the initial period of three months, is the priority.

Under the tolling deal signed in mid-February, Morgan Stanley, KKR and AtlasInvest deliver crude oil to Coryton and receive refined products in return while paying a fee to cover the administrators' costs.

Before the agreement was signed, the administrators were keeping the refinery running by acquiring crude oil cargoes on an ad hoc basis. But there were no guarantees a new cargo would be found in time to avoid a shutdown.

Dow Jones Newswires

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