Oil-Spewing Refiner Seeks Bankruptcy Following EPA Orders Shutdown
(Bloomberg) — An oil refinery that was the moment 1 of the premier in North
(Bloomberg) — An oil refinery that was the moment 1 of the premier in North The united states filed for individual bankruptcy after a collection of environmental breaches and a government-requested shut down, highlighting pressures faced by the oil market to control its environmental impact.
Limetree Bay Refining LLC sought creditor protection on Monday soon after the U.S. Environmental Protection Company halted its operations earlier this 12 months. The St. Croix, U.S. Virgin Islands-centered refinery, which submitted for personal bankruptcy in 2015 less than earlier ownership, stated in a statement that it programs to use the court defense procedure in Houston to negotiate with lenders and fairness holders and weigh possibilities together with asset income.
The refinery sought bankruptcy “due to serious regulatory and economical constraints” that forced it to suspend its refinery functions indefinitely, and has lined up as considerably as $25 million of so-termed debtor-in-possession funding that will aid it keep the refinery through the Chapter 11 system, according to the assertion.
Arena Buyers is delivering the DIP loan as a result of an affiliated entity, in accordance to men and women with information of the condition who questioned not to be named talking about a non-public subject. A consultant for Arena didn’t instantly answer to a request for comment.
The refinery, which experienced restarted operations in February immediately after many years of inactivity, was perfectly positioned to course of action sour crude oil provides from South The us and meet up with fuel desire in regions these kinds of as the U.S. East Coastline.
The 200,000-barrel-a-day refinery in May perhaps was pressured to halt operations subsequent emissions incidents that involved contamination of drinking drinking water. On June 21, the business reported it was suspending ideas to restart the enterprise and cutting far more than 270 staff after initiatives to increase capital foundered. In the decades prior to the difficulties, Limetree used far more than $4 billion to refurbish the refinery, according to court docket papers.
Limetree’s woes have prompted investigations by the EPA and the Virgin Islands Section of Scheduling and National Methods, according to court docket papers. The Workplace of the U.S. Lawyer in the Virgin Islands also asked for to take a look at the refinery, and the corporation faces various course-action lawsuits associated to the alleged pollution challenges, the company’s chief restructuring officer, Mark Shapiro, said in court docket documents.
The organization is in talks with regulators about the situations for reopening, Shapiro claimed. Affiliates of BP Plc and Baker Hughes Co. are amid its most significant creditors, in accordance to court papers.
Limetree is managed by EIG Global Strength Associates, which explained in an emailed statement that it turned the “reluctant” proprietor of the troubled refining procedure in April as aspect of a restructuring. EIG experienced formerly led a group of Limetree’s so-identified as mezzanine creditors and has been involved in efforts to revive the refinery given that 2018. EIG, dependent in Washington D.C., specializes in personal investments in strength infrastructure.
Terminal Small business
Limetree was formed in 2016 soon after an affiliate of ArcLight Money Partners and Freepoint Commodities LLC acquired the St. Croix refining units and terminal assets from Hovensa LLC, a venture owned by Hess Corp. and Venezuela’s point out-owned Petroleos de Venezuela SA that experienced submitted for personal bankruptcy months previously. In 2018, Limetree declared an about $1.3 billion funding strategy to restart the idled refinery, which started operating earlier this calendar year.
The refinery’s guardian will go on to work its related oil storage terminal company. That device is functioning with economical and lawful advisers to navigate financial strains involved with the shuttered refinery, Bloomberg noted on Monday.
The individual bankruptcy will come at a time when the market is battling with shrinking profitability, extra creation potential and climbing opposition from mega-refineries in Asia amid a drive by the Biden Administration to transfer the U.S away from fossil fuels.
The situation is Limetree Bay Services LLC, 21-32351, U.S. Bankruptcy Courtroom for the Southern District of Texas (Houston).
(Updates with information about collectors starting in 8th paragraph)
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