Swiss oil refiner Petroplus – which runs one of the largest refineries in the UK – has filed for insolvency after defaulting on more than £1bn.
Coryton refinery in Essex has reportedly stopped production fuelling fears over the future of some 1000 jobs.
The former BP-owned refinery is a vital supplier of petrol for London and the South East and concerns have been raised forecourts could face distribution delays.
In a statement released on its website the company explained it had been negotiating with its lenders to ‘reopen credit lines needed to maintain operations and meet financial obligations’.
But these talks have proved unsuccessful, forcing the company to default on £1.12bn of senior notes and convertible bonds and file for insolvency in Switzerland.
Petroplus’ chief executive officer, Jean-Paul Vettier, said: “It is unfortunate to have reached the point where the executive committee and board of directors have to inform our employees, shareholders, bondholders and other stakeholders about these circumstances.
“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.
“We are fully aware of the impact that this will have on our workforce, their families and the communities where we have operated our businesses.”
And speaking on BBC Radio 5 Live, East of England MEP Richard Howitt, warned supplies across London and the South East “could be affected” and “could impact the Olympics”.
Shares in Europe’s largest independent oil refiner – which can produce a peak output of 220,000 barrels a day at the Essex site – were suspended yesterday.
It comes after Standard and Poor’s downgraded the company’s credit rating earlier this month.
By Andy Pearce
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