STOCKHOLM (Reuters) - Nynas AB, owned by Venezuela’s state-run PDVSA and Finland’s Neste Oil (NESTE.HE), on Friday filed for company reorganization at a Swedish court as the refiner failed to extend loans as it dealt with the fallout of U.S. sanctions.
Swedish Nynas’ business has suffered as the United States in October introduced changes to a license that had allowed it to import Venezuelan oil despite sanctions imposed on its owner PDVSA.
The refiner said in a statement that it had been unable to extend loans with its banks, leaving it unable to pay its debts and leaving it with no other option than to turn to the courts.
Applying for company reorganization is a form of administration where court-appointed administrators are tasked with restructuring the firm with the aim of avoiding bankruptcy.
“In the short term, we see no other opportunity than to request a reorganization, in the long term, we see good conditions to continue the business. Nynas has a strong offering with good demand from the market,” acting Chief Executive Bo Askvik said.
Nynas, which employs 1,000 people at refineries in Sweden, Germany and Britain specializing in products for asphalt production, has been seeking to secure alternative supplies of oil, but said the U.S. sanctions against oil and gas company PDVSA had eroded its profitability over time.
The Sodertorn district court appointed Mikael Kubu, from judicial reorganization specialists Ackordscentralen, and Lars Eric Gustafsson, at law firm Hamilton Advokatbyra, to lead the reorganization of the company.
Reporting by Anna Ringstrom, editing by Niklas Pollard