(Updates with comment from Swiss ministry spokeswoman in seventh paragraph.)
Dec. 27 (Bloomberg) -- Petroplus Holdings AG, Europe’s largest independent refiner, fell to a record low after lenders froze about $1 billion in uncommitted loans that the company needs to buy crude for its five European oil refineries.
The revolving credit lines are “critical” for business, the Zug, Switzerland-based company said in a statement today. Petroplus’s five refineries have a combined throughput capacity of about 667,000 barrels a day, according to the company. A spokesperson couldn’t be reached for comment.
Petroplus has only a few days’ worth of oil reserves left, Swiss newswire AWP reported, citing Chief Financial Officer Joseph Watson. The refiner, which usually buys about half a million barrels of crude a day, can’t buy any more oil at the moment and needs all its credit lines to keep business going, he was quoted as saying.
Petroplus fell 46 percent to close at 1.85 francs in Zurich. The shares have lost 85 percent this year.
The credit freeze “is a serious issue as in the worst case the company would lack the funds required to maintain operations,” Vontobel Holding AG said in a note today. “We strongly advise investors to stay clear of the stock until a sustainable financing can be restored.”
Petroplus is “evaluating additional strategic options to maintain operations in its European refining and marketing system,” according to the statement.
No Government Assistance
The Swiss government hasn’t had a request for assistance from Petroplus, Switzerland’s only independent refinery company, Economy Ministry spokeswoman Evelyn Kobelt said.
“The government normally doesn’t give assistance to companies having problems,” she said.
The refiner reported a net loss of $147 million in the third quarter, which widened from a loss of $93.8 million a year earlier, according to a presentation published Nov. 2 on its website. Petroplus also reported net losses in the previous two quarters.
Profits from processing Brent crude, the European benchmark, into fuels in northwest Europe plunged to 51 cents a barrel last month from $1.52 in October, the International Energy Agency said in a Dec. 13 report.
“The company intends to continue negotiations with the banks for a prompt restoration of the credit lines,” Petroplus said in the statement.
Petroplus signed a three-year, $1.05 billion revolving credit facility secured by oil inventories and trade receivables in 2009, with an option to increase the amount to $2 billion on a “preapproved but uncommitted basis,” it said at the time.
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