May 16, 2021

DealBook: Swiss Oil Refiner Petroplus to File for Insolvency

LONDON — Europe’s economic woes continue to spread.

Petroplus Holdings, the largest independent oil refiner in Europe, said on Tuesday that it was filing for insolvency after its creditors demanded repayment on $1.75 billion of outstanding debt.

Petroplus, based in Zug, Switzerland, had been in negotiations with lenders to gain access to much-needed credit. Like other oil refiners across Europe, Petroplus has been struggling with falling consumer demand and dwindling margins resulting from an economic downturn and continued high crude oil prices.

The company said it was filing for insolvency in Switzerland, and would file similar paperwork in other European countries where it has operations, including France, Germany and Britain. No timing was given on the legal proceedings, and the company could not be reached for comment.

Insolvency, when a company’s debts exceed its assets and cash flow, has been rising in many European countries, as companies grapple with a weak economy and a reduction in credit from banks. It sometimes leads to bankruptcy.

Petroplus said it had been unable to reach agreement with creditors who on Monday had demanded repayment of outstanding senior notes and convertible bonds. Lenders also have started enforcement actions and appointed a receiver to oversee the liquidation of Petroplus’s marketing operations in Britain, the company said.

“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,” the Petroplus chief executive, Jean-Paul Vettier, said in a statement.

The company’s share price dropped 81 percent in early trading in Switzerland on Tuesday. Its stock was suspended on Monday and has fallen more than 90 percent over the last 12 months. Standard Poor’s downgraded the company’s rating for the second time in less than a month on Jan. 17.

Last week, Petroplus said it was looking to sell its operations in France, Belgium and Switzerland in an effort to gain access to credit. The company shut down its refining units in those countries earlier in January after it ran out of money to buy crude oil.

Article source: http://dealbook.nytimes.com/2012/01/24/swiss-oil-refiner-petroplus-to-file-for-insolvency/?partner=rss&emc=rss

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