PwC has confirmed it has secured a deal to ensure the ongoing shipment of refined oil products from the Coryton Oil Refinery in Essex which entered administration on Tuesday.
Steven Pearson and Stephen Oldfield, joint administrators of Petroplus Refining and Marketing Ltd (PRML), said the deal was hammered out over night amid fears that supplies to the South East region may have been impacted.
Pearson said the administrators had worked tirelessly to ensure negotiations reached this stage quickly.
Swiss company Petroplus entered administration on Tuesday having defaulted on more than £1 billion of debt.
The company took over the Coryton site from energy giant BP and it currently employs around 950 people.
The administrators of the company are continuing to negotiate with the group’s lenders to reopen credit lines needed to maintain operations and meet financial obligations.
Petroplus’ chief executive officer, Jean-Paul Vettier, said obtaining credit had become more difficult in recent months. This admission came after ratings agency Standard and Poor’s downgraded the company at the start of January.
Nick Hood, head of external affairs at corporate health monitoring group Company Watch, said the failure of Petroplus in the UK and the consequent threat to the refinery at Coryton should be a warning over the dangers of foreign inward investment by impecunious overseas investors.
He added: “Ultimately, it was an unreasonably high gearing position at a time of acute risk aversion by lenders generally that has put paid to Petroplus. It also shows how important it is for suppliers and other stakeholders to look at the group position when assessing the financial risk profile of a UK subsidiary.
“Our monitoring system showed a healthy picture for the Petroplus UK operating company, but a much more vulnerable position at group level. This syndrome has emerged as a major factor in a number of recent high profile retail failures, such as La Senza and Peacocks.”
Stephen Metcalfe, MP for Basildon and East Thurrock, confirmed to Insolvency News that production never stopped but the administrators had stopped allowing processed fuel from leaving the site.
He explained: “As of last night they are now supplying fuel across the South which is great news – distribution is underway at the moment. Tankers are leaving the site. Everyone is very pleased – it’s a very positive step.
“It has been an iconic business in that part of the world for a number of years.
Now we are focussing on securing the long term supply of crude oil into the refinery – that’s being worked on at the moment.
“When the company went into administration all contracts fell, and it was about getting the deals done again. When in the past, they were paid by the parent company, they are now being paid by the refinery directly.
“The reason why the site is still operating is because the staff and the management have taken difficult decisions to turn it into a profitable business.
“Over the years the company has already been through the difficult process of restructuring here in Coryton.”
By Joe McGrath and Andy Pearce