UPDATE 1-Court gives Petroplus Swiss refinery 2 months grace

Tue Jan 31, 2012 1:44pm EST

Related Topics

* Swiss court grants Cressier grace period until March 31

* Local minister says negotiations underway with 3 buyers (Changes dateline, adds details)

By Emma Farge

NEUCHATEL, Switzerland, Jan 31 (Reuters) - Switzerland's Cressier refinery, owned by debt-crippled Petroplus, has obtained a two-month grace period under Swiss law to keep creditors at bay as it seeks to reorganise its business, a regional court ruled on Tuesday.

The court said the ruling would be in place until March 31, 2012 and obliged the refinery to maintain a minimum level of activity and to pay its workers.

"It's a set point in favour of the site. The match isn't won," said Thierry Grosjean, economy minister for the Swiss canton of Neuchatel.

Switzerland-based Petroplus, Europe's largest independent refinery by capacity, is filing for insolvency after battling with high debt and poor refining margins.

The economy ministry of the Swiss canton of Neuchatel said on Monday the Cressier refinery had attracted as many as 10 interested parties.

On Tuesday, Grosjean repeated that there were close to ten interested buyers, adding that serious negotiations were underway with three parties.

"I had a call from one of them (potential buyers) today. Some negotiations are more advanced than others....there are three that are advanced," he told journalists in the Swiss canton of Neuchatel.

Slim margins have pushed several European refiners to put plants on the market and some have been unable to find buyers even at rock-bottom prices.

Cressier, which employs some 250 people, is keen to avoid closing the site, which would entail high costs.

"It's a form of relief," said Swiss union UNIA spokeswoman Anne Rubin, adding it avoided the refinery falling into bankruptcy overnight. "It keeps the door open for reduced working hours," she said.

Swiss legal authorities can prolong the grace period for a period of up to 24 months. An oil trader familiar with the European downstream market said it could be possible for another buyer to eke out better margins at the Swiss plant.

"I'm not surprised there is wide interest in the Cressier plant, the structure of the market here is good. Petroplus' big mistake was they didn't have a deal with the pipeline company, so they were probably paying heavily to pump the oil." (Additional reporting by Nathalie Olof-Ors and Martin de Sa'Pinto in Zurich, editing by Keiron Henderson)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.