Member Article

Petroplus creditors to receive just 6.4% of claims

The joint administrators of the UK subsidiary of Petroplus, the owners of the stricken Coryton oil refinery, have said creditors will receive just 6.4% of their claims.

An update from administrators at PwC estimate the net funds available for distribution to unsecured creditors may be between $102m to $135m.

Trading losses from refining during the six month period of administration are currently estimated at $22m-$31m, on sales of some $347m.

The claim against the Swiss affiliate, Petroplus Marketing AG (PMAC), of $450.4m has been ascribed no recovery value in the administrators’ estimates as it risks being subordinated in PMAG Swiss insolvency proceeding.

In June, PwC announced the sale of the refinery to a joint venture of Royal Dutch Shell, Vopak and Greenenergy.

The sale of all the refinery assets is expected to be concluded in the coming few months, although the terms of the sale remain confidential.

Steven Pearson, Joint Administrator and PwC partner, said: “This has been an exceptionally difficult administration. The information we have published today illustrates the scale of financial and operational challenges we faced in operating the refinery for nearly six months.

“The unfortunate reality is that, despite rigorous cost control, the refinery incurred significant losses from operations between January and June.

“This high risk, low reward environment was the main driver in having to cease operations – put simply, we could not afford to incur the ongoing losses associated with continuing refining.

“Despite this, during the period since January we have explored all possible options and concluded a sale of the site and of significant assets of the company. Consistent with our statutory duties, the sale of Coryton for an alternative use represents the best possible outcome for unsecured creditors. We are now working towards meeting the conditions of the sale contract, in ensuring the site is in a stable state ahead of handover and completion.

“Operating the refinery and managing the sale and closure have been both technically complex and unusually demanding on all the people involved.

“I would again like to publicly thank the management, employees, contractors, suppliers, customers, the authorities and the PwC team for their commitment throughout this administration.”

This was posted in Bdaily's Members' News section by Tom Keighley .