Bankrupt refinery gets $10 MM debtor-in-possession funds to unwind
Limetree Bay refinery can get another $10 million in debtor-in-possession (DIP) financing this month, a Houston bankruptcy court judge said, cash that will go toward unwinding operations.
The St. Croix, U.S. Virgin Islands, refinery filed for bankruptcy in July after investors poured $4.1 billion into an unsuccessful revival of the aging facility. An initial restart had to be abandoned after its stacks spewed oil on homes and contaminated drinking water.
The 210,000 barrel per day refinery is due to receive up to $25 million in interim financing while seeking to restructure nearly $2 billion in debt. It thus far has received $5.5 million from DIP lender Arena Investors LP.
On Monday, Jefferies Financial Group Inc said it has not found a buyer for the facility despite reaching out to several parties. But Jefferies co-head of U.S. restructuring, Michael O’Hara, said if a buyer was found, there were parties available to replace BP Plc as the facility’s crude oil provider.
The company sought cash to pay workers to remove oil from the nearly-shuttered facility and to reimburse former employees for travel costs.
U.S. prosecutors are investigating potential criminal violations of the Clean Air Act, Limetree bankruptcy counsel Elizabeth Green said on Monday.
The investigation has deterred potential investors, Limetree’s lawyers have said.
Judge Jones, who is a veteran of refinery restructurings in the Southern District of Texas court, said in July he was concerned about Limetree’s ability to through Chapter 11 with the existing DIP loan.
“I don’t think there’s an alternative,” Jones said on Wednesday.
The process of decommissioning the refinery will take several months, the company’s owner, a consortium led by EIG Global Energy Partners, told the Texas court this month. (Reporting by Laura Sani
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