PwC administrators face closing petrol supplier to London
Coryton, part of Petroplus Refinery, supplies 20% of London and the South-East’s petrol
PWC ADMINISTRATORS may be forced to close the Coryton oil refinery if it fails to find a buyer soon.
The oil refinery is responsible for the supply of about 20% of London and the South-East’s petrol. It employs 500 staff directly and a further 350 through contracts.
In January, Steven Pearson and Stephen Oldfield, from PwC, were appointed joint- administrators to Petroplus Refinery and Marketing which operates the Coryton plant in Essex and has a Bitumen subsidiary in Swansea.
The joint administrators later entered an arrangement which allowed the Coryton refinery to continue functioning while various restructuring and sale options were explored. Since that date work has been ongoing to either sell the refinery as a going concern or to refinance its operations.
However, a statement from the administrators said: “Regretfully, despite this extensive exercise over the past four months it has not yet been possible to find a solution which sees the refinery continue as a going concern.
“The current economic environment, the challenge of raising $1bn (£625m) of funding for the refinery, including the $150m capital expenditure ‘turnaround’ project ultimately proved prohibitive in the face of an over supplied European refinery market for both buyers and investors.”
Pearson told The Financial Times: “Realistically there’s a relatively low prospect of securing a sale.”
“The current financing market is exceptionally difficult – capital is short and expensive. Prospective investors in the refinery faced a significant capital expenditure need, as well as a fragile market for refined oil products. These factors have conspired against us in trying to structure a deal,” he said.
Any closure processes is likely to take up to three months, during which time the administrators will continue to try and find a buyer.