Bloomberg News

Petroplus Prepares to File for Insolvency as Creditor Talks Fail

January 24, 2012

Jan. 24 (Bloomberg) -- Petroplus Holdings AG, the Swiss refiner that shut three plants after having its credit lines suspended last month, said it plans to file for insolvency after talks with lenders failed.

The company plans to file in Switzerland and other jurisdictions, Petroplus said in a statement today. Petroplus, based in Zug, Switzerland and Europe’s largest independent refiner, had about $1 billion in credit lines frozen last month, preventing it from supplying its plants with crude.

Petroplus said last week that it may sell refineries in France, Belgium and Switzerland, while continuing to operate the plants in the U.K. and Germany. As well trying to renegotiate financing with its banks, Petroplus had also been seeking a crude supply deal on terms that would reduce the cash needed to keep refineries going.

Earlier this month, the company reached a temporary agreement with creditors to keep plants in Coryton, U.K., and Ingolstadt, Germany, in operation. Petroplus’s credit rating was cut by Standard & Poor’s for a second time on Jan. 17.

The outlook for oil refining in the next two decades is “dire” given excess capacity in the industry, BP’s Chief Economist Christof Ruehl said on Jan. 18. Other refineries in Europe have been forced to close because overcapacity is making it unprofitable to turn crude oil into gasoline and other fuels.

LyondellBasell Industries NV decided to close its 105,000 barrel-a-day Berre refinery in France after failing to find a buyer.

--Editors: Torrey Clark, Paul Verschuur

To contact the reporter on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net -0- Jan/24/2012 06:18 GMT


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