Philly refiner nears final deal with developer, amends price again
A deal to sell the Philadelphia Energy Solutions (PES) oil refinery to a Chicago-based real estate developer is expected to close on Friday for $26.5 million less than originally agreed to, lawyers for the bankrupt refiner said in court.
The sale to Hilco Redevelopment Partners (HRP) would end the prospect of a restart of the 335,000-barrel-per-day south Philadelphia refinery, the largest and oldest on the East Coast, which was idled a year ago after a fire badly damaged the plant.
PES agreed to reduce the purchase price to $225.5 million, $26.5 million less than agreed upon earlier this year. HRP requested a reduction due to economic uncertainty caused by the coronavirus pandemic and higher-than-expected costs to clean up the refinery site.
Earlier this month, the two sides asked the U.S. Bankruptcy Court for the District of Delaware to cut the purchase agreement by $27.5 million but settled overnight on the current price tag, lawyers for the refiner said. The court approved the new agreement.
PES filed for bankruptcy and shut its refinery after a series of explosions and fire at one of its gasoline processing units on June 21, 2019. More than 1,000 full-time employees were laid off, including 640 United Steelworkers members.
Union members were not given severance and have been waiting for the sale to be finalized in order to receive several thousand dollars in transition pay. The price cut will not affect that pay, said Steve Levine, an attorney for PES’ unsecured creditors.
Certain financial lenders to PES will receive less as a result of the lower price.
Reporting by Laila Kearney; editing by Jonathan Oatis
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