* Bidders have until Nov. 5 to submit offer
* Production to continue until mid-December
* Administrator says bidders did not show financial capacity
By Michel Rose
ROUEN, France, Oct 16 (Reuters) - A French court has rejected two bids to take over the Petit-Couronne oil refinery, the oldest in France, sending it into liquidation unless a new offer is submitted by Nov. 5.
The refinery was operated by insolvent oil company Petroplus.
The ruling is bad news for French President Francois Hollande as he struggles to stop high-profile industrial closures that are hurting his election pledge to turn around the stalled economy.
French Industry Minister Arnaud Montebourg, who has been actively trying to rescue the plant, said in a statement the government would continue efforts to find a buyer.
The commercial court in Rouen rejected two bids, including one from Dubai-based NetOil, the unlisted group of Middle Eastern businessman Roger Tamraz, and from Hong Kong-based Alanfandi Petroleum Group. The NetOil bid was regarded by the refinery's trade unions as the most likely to succeed.
"The court assessed that the bidders had not answered to the court's demands to demonstrate their technical and financial capacity," the Petroplus administrators said in a statement.
Tamraz told Reuters late on Tuesday that NetOil would not give up and would try to meet the court's demands by the new deadline.
"We believe in this project. It's also a national asset of France, the closest refinery to Paris," Tamraz said in a telephone interview from Paris. "All this is a slap to this new government, which is trying to save jobs. There's a bit of a mischief."
Tamraz said his team had presented letters of recommendation from BNP Paribas SA and Commerzbank AG, but the court in Rouen wanted more information about a possible deal with an unnamed oil trader.
Some 500 jobs are at stake and the decision was met with shouting and weeping from workers standing outside the court.
"They are going to kill us," Yvon Scornet, spokesman for the refinery's unions, told reporters after the decision.
The unions were part of the process to find new buyers, liaise with the government and help bidders with the paperwork.
Marie-Jo Herlin, who worked at the plant with her husband and son, said she was flabbergasted.
"I can't believe it. I am 57, and it's been 57 years that the refinery feeds me and I thought it would feed my grand-children and my family," Herlin told Reuters outside the court.
"We've restarted the refinery, we make profits, what else do they need? They want to kill us, that's all."
The refinery, which will continue to operate until mid-December, was shut down in January, but restarted production in June thanks to a temporary oil processing deal with former owner Shell.
French refiners have been struggling for years because of poor margins, weak demand and a surplus of gasoline capacity, while the traditional market for French gasoline exports, the United States, has dried up.
Tamraz had pledged to invest 500 million euros ($646.80 million) in the refinery and said he had been in contact with a numerous French government officials at the ministries of defence and industry, customs and the strategic oil reserves agency.