July 26, 2021 [Financierworldwide] – Following a series of operational setbacks which shuttered its St. Croix facility, US Virgins Islands refinery Limetree Bay Refining, LLC, as well as several of its affiliates, has filed for Chapter 11 bankruptcy.
Through the Chapter 11 process, Limetree Bay intends to engage in discussions with its lenders, creditors, equity owners and others to evaluate options to maximise the value of the estate and recoveries for stakeholders, including exploring a potential sale of its assets.
Furthermore, the company has received commitments for up to $25m in new debtor-in-possession (DIP) financing that, upon court approval, is expected to provide sufficient liquidity to meet ongoing business obligations related to the maintenance of the refinery during the Chapter 11 process.
The Chapter 11 filing was necessitated in part by the temporary suspension of Limetree Bay’s petroleum refining and processing operations in May 2021 and the indefinite suspension of its plans to restart the refinery due to severe regulatory and financial constraints. The refinery had only restarted in February this year after being idle for nearly a decade.
It is expected that management will continue to be responsible for handling the care and maintenance of the refinery and all other necessary day-to-day operations throughout the Chapter 11 process. At the same time, Limetree Bay’s parent expects to continue operations at its oil storage terminal business.
“We are extremely grateful to our investors, employees and business partners for standing by us through the restart process and these uncertain times,” said Jeff Rinker, chief executive of Limetree Bay. “Severe financial and regulatory constraints have left us no choice but to pursue this path, after careful consideration of all alternatives.”
Capable of processing around 200,000 barrels per day, key restart work at Limetree Bay’s St. Croix site began in 2018, including the 62,000 barrels per day modern, delayed Coker unit, extensive desulfurisation capacity, and a reformer unit to produce clean, low-sulfur transportation fuels. The restart project provided much needed economic development in the US Virgin Islands and created more than 4000 construction jobs at its peak.
Mr Rinker concluded: “The Chapter 11 process provides Limetree Bay with the clearest path to maximise the value of our estate for our stakeholders while safely preparing the refinery for an extended shutdown.”
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