Bankrupt Limetree Bay refinery secures $ 10 million in debtor-in-charge funds to unwind



Aug. 11 (Reuters) – The Limetree Bay refinery may secure another $ 10 million debtor-in-owner (DIP) financing this month, a Houston bankruptcy court judge said on Wednesday, cash that will be used for the settlement of transactions.

The St. Croix refinery in the U.S. Virgin Islands filed for bankruptcy in July after investors invested $ 4.1 billion in an unsuccessful relaunch of the aging facility. A first restart had to be abandoned after its chimneys spat oil on houses and contaminated drinking water.

The 210,000 bpd refinery is expected to receive up to $ 25 million in bridge financing while seeking to restructure nearly $ 2 billion in debt. It has so far received $ 5.5 million from lender DIP Arena Investors LP.

On Monday, Jefferies Financial Group Inc said it had not found a buyer for the facility despite communicating with multiple parties. But Jefferies’ US co-head of restructuring, Michael O’Hara, said if a buyer was found, parts would be available to replace BP Plc as the facility’s crude supplier.

“I’m counting on O’Hara to bring me a buyer,” US bankruptcy court judge David R. Jones said on Wednesday.

The company demanded money to pay workers to remove oil from the nearly closed facility and to reimburse former employees for travel expenses.

U.S. prosecutors are investigating potential violations of the Clean Air Act, Limetree bankruptcy lawyer Elizabeth Green said on Monday.

The investigation deterred potential investors, Limetree lawyers said.

Judge Jones, who is a veteran of refinery restructurings in the South Texas District Court, said in July he was concerned about Limetree’s ability to go through Chapter 11 with the existing DIP loan.

“I don’t think there is any alternative,” Jones said Wednesday.

The process of dismantling the refinery will take several months, the owner of the company, a consortium led by EIG Global Energy Partners, told the Texas court this month. (Reporting by Laura Sanicola; editing by Gary McWilliams and David Gregorio)



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