Petroplus to file for insolvency

Swiss-based oil refiner Petroplus, which had its credit lines suspended last month, is filing for insolvency after talks with creditors failed.

The group has been put on notice to pay off its debts, triggering its default on $1.75 billion (SFr1.62 billion) of senior notes (senior debt), and convertible bonds.

“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 in a statement on Tuesday.

Petroplus’ board is now preparing to file for insolvency in Switzerland and the group said similar steps would be taken elsewhere.

Europe’s largest independent refiner by capacity, which operates from canton Zug, has been in intense talks with its lenders over recent weeks after they withdrew credit late last year.

The group’s problems come from falling refining margins and a high debt load that was a result of its private equity-backed acquisition-based business model.

Petroplus already announced on January 20 that it would be selling its Petit Couronne refinery in France and that it was “evaluating strategic alternatives” for two others, including the one at Cressier in Switzerland, which employs 260 people.

Switzerland’s largest trade union, Unia, called on authorities to do everything possible to facilitate a sale of the refinery and maintain jobs.

And speaking to reporters on Tuesday, Thierry Grosjean, Economics Minister of the Neuchâtel cantonal government, suggested all may not be lost for the Swiss refinery at Cressier. He said “between five and ten” international investors were potentially interested in purchasing the site.