Canadian refinery backer wins creditor protection

Tue Jun 24, 2008 12:12pm EDT
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CALGARY, Alberta (Reuters) - A company proposing a $4.6 billion refinery on Canada's East Coast has won protection from creditors, allowing it to devise a restructuring plan that may include selling assets or bringing in new partners, one of its owners said on Tuesday.

Newfoundland's Supreme Court granted a request by Newfoundland and Labrador Refining Corp to block a bid by a unit of engineering firm SNC-Lavalin Group Inc to have the firm declared bankrupt, said Altius Minerals Ltd, which owns 39.6 percent of the refinery developer.

NLRC wants to build a 300,000 barrel a day refinery on the province's southeast coast, and has its environmental approvals in hand.

But it was hampered in its ability to attract financing for the project after credit markets tightened following the U.S. subprime crisis.

Altius shares jumped C$1.84, or 24 percent, to C$9.38 on the Toronto Stock Exchange on Tuesday. The stock had tumbled more than 40 percent last week when it said NLRC had filed for protection from creditors.

Managers with the would-be refiner are working with financial advisers to come up with a plan that may include selling assets, bringing in other partners or setting up some new financing, Altius said.

Altius's partners in the proposal are Dermot Desmond, founder of Dublin-based International Investment and Underwriting, Scottish financier Harry Dobson, and Stephen Posford, the former head of European operations for investment bank Salomon Brothers.

(Reporting by Jeffrey Jones; editing by Rob Wilson)