PARIS, March 8 Egyptian group Arabiyya Lel Istithmaraat has pulled out from the race to buy the troubled Petit-Couronne refinery in northern France, a blow to France's high-profile industry minister who had personally supported its bid.
The refinery owned by insolvent Swiss company Petroplus is due to shut on April 16 if administrators decide that the bids submitted so far, from little-known Swiss, Libyan and French firms, do not constitute valid offers.
"This negative decision was motivated by the great complexity of this takeover within the current judiciary framework and the lack of time ... to present a viable industrial project," the group said in a statement on Friday.
The Socialist government wants to avoid the refinery's 470 workers being laid off at a time unemployment is at a 14-year high and factories including ones owned by Goodyear and carmaker Peugeot are threatened with closure.
The outcome of the bidding process is a test of credibility for Arnaud Montebourg, who lost face last year when Prime Minister Jean-Marc Ayrault overruled his threat of a state takeover of ArcelorMittal blast furnaces.
"Mohammed Metwalli, president of Arabiyya Lel Istithmaraat, appreciated the top-quality reception given by Industrial Recovery Minister Arnaud Montebourg, its staff and those of the President and the Prime Minister," the statement in French said.
Last week, two bidders - south Libyan group Murzuq Oil and Switzerland-based investors Terrae International - merged their offers.
Another contender is NetOil, led by middle-eastern businessman Roger Tamraz, whose first offer was rejected by the commercial court in Rouen, Normandy, last year.
Shell, which operated the refinery since it was opened in 1929, sold the plant to Swiss refiner Petroplus in April 2008, before Petroplus filed for bankruptcy in January last year. (Reporting by Michel Rose; editing by James Jukwey)