January 21, 2020 / 2:51 PM / a month ago

Swedish refiner Nynas proposes restructuring to escape U.S. sanctions

STOCKHOLM (Reuters) - Swedish oil refiner Nynas, which is owned by Venezuela’s state-run PDVSA and Finland’s Neste Oil, said on Tuesday it planned to reorganize its business in an attempt to disentangle itself from U.S. sanctions imposed on Venezuela.

Nynas said the proposed changes to its ownership structure, backed by both PDVSA and Neste Oil, were filed with the United States’ Office of Foreign Assets Control (OFAC) on January 17.

The refiner, which was placed in the hands of a court-appointed administrator late last year, added that it would only proceed with the changes if and when OFAC confirmed that the move would mean Nynas no longer being subject to its sanctions.

“The sanctions against PDVSA and Venezuela have had a considerable negative impact on Nynas’ operations. It is therefore necessary to immediately make changes to the ownership structure,” the company said in a 17-page document.

The reorganization is vital for the Swedish refiner, which said in December that the sanctions had cut it off from bank funding and left it unable to pay its debts.

Nynas said on Tuesday that relief from the sanctions would allow it to trade in U.S. dollars and access credit again.

The United States in October introduced changes to a license that had previously allowed Nynas to import Venezuelan oil despite sanctions imposed on its owner PDVSA, sparking a crisis at the refiner which employs about 1,000 people in Sweden, Germany and Britain.

Nynas said in the document it had engaged Carnegie Investment Bank AB to secure short-term bridge financing of 1.5 billion Swedish crowns ($158 million) and attract new investors.

The company, which specializes in products for asphalt production, said it now needs to purchase oil as its current stock runs out in March.

Nynas added that it does not expect to be able to buy Venezuelan oil even if OFAC approves the changes, meaning it will need to find new suppliers and adapt its equipment.

Nynas said the restructuring plan does not include any job cuts.

Reporting by Colm Fulton; editing by Niklas Pollard and Kirsten Donovan

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