Banks call time on debt-laden Petroplus

Tue Jan 24, 2012 7:17am EST
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By Martin de Sa'Pinto and Claire Milhench

ZURICH/LONDON (Reuters) - Swiss-based oil refiner Petroplus PPHN.S is filing for insolvency, putting over 2,000 jobs across Europe at risk, after banks called in debts, triggering a $1.75 billion default.

Europe's largest independent refiner by capacity has been teetering since its lenders restricted credit late last year, a victim of thin refining margins and high debt that was a result of its private equity-backed, acquisition-based business model.

In an email to customers seen by Reuters on Tuesday, Petroplus said it has halted all supplies from its Coryton refinery in southern England.

However, a spokesman for the Department of Energy and Climate Change said the Coryton refinery remains operational. The plant is a major fuel supplier to the South East.

Petroplus earlier this month stopped production at three refineries in Switzerland, France and Belgium and halved output from plants in Britain and Germany as it struggled to pay for crude.

"We have worked hard to avoid this outcome, but were ultimately not able to come to an agreement with our lenders to resolve these issues given the very tight and difficult European credit and refining markets," Petroplus Chief Executive Jean-Paul Vettier said in a statement on Tuesday.

Petroplus' board is now preparing to file for insolvency in Switzerland, the group said. PriceWaterhouseCoopers was appointed administrator of the company's UK unit on Tuesday.

"The primary goal of Petroplus' Board of Directors is to ensure that operations are safely shut down and to preserve value for all stakeholders," Petroplus said.   Continued...