Petroplus Holdings AG, the Swiss oil refiner trying to avoid bankruptcy, halted deliveries from its U.K. plant after lenders forced it to stop selling the fuel, according to a local government official.
“With Coryton unable to let delivery lorries leave its premises, it is clear this is now make or break both for the refinery and for its parent company,” Richard Howitt, a European Parliament member for the east of England, said in a statement yesterday, citing managers and workers at the plant. Lenders have “imposed a condition preventing Coryton from continuing with deliveries,” he said.
Europe’s largest independent refiner asked for its shares to be suspended earlier yesterday, according to a notice on the Swiss stock exchange. The Zug, Switzerland-based company is fighting to avert collapse after lenders halted about $1 billion in credit lines last month, preventing crude purchases for its five plants. Petroplus had managed to keep Coryton and a refinery at Ingolstadt in Germany running at reduced capacity.
Fredrik Olsson, a Petroplus spokesman, didn’t return an e-mail and phone call seeking comment yesterday.
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. It has also been talking to companies about a crude-supply deal on terms that would reduce the cash needed to keep refineries going.
The Coryton plant, located on the Thames estuary east of London, is capable of processing 220,000 barrels a day, according to data compiled by Bloomberg. Its closure would cost about 1,000 jobs, said Howitt, a member of the Labour party.
Credit Rating Cut
Petroplus’s credit rating was cut by Standard & Poor’s for a second time on Jan. 17. Earlier this month, the company reached a temporary agreement with creditors to keep Coryton and Ingolstadt in operation.
The outlook for oil refining in the next two decades is “dire,” given excess capacity in the industry, BP Plc’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. Petroplus stopped oil-processing at its Reichstett plant in France in April and is seeking a buyer for the site as a terminal.