Nov. 14 (Reuters) – The closed Limetree Bay refinery in the U.S. Virgin Islands has received an offer of $ 20 million in stalking horses from a company seeking to restart the facility, according to a case filed on Sunday in a court in Connecticut bankruptcy.
The refinery, which had been closed for nearly a decade, reopened earlier this year under the ownership of private equity firms EIG and ArcLight Capital after investors invested $ 4.1 billion in its revival. Read more
Investors wanted to restart the facility to produce 210,000 barrels per day of gasoline and other fuels. Its scheduled restart was delayed for more than a year and it only worked a few months before U.S. regulators shut it down after its smokestacks spit oil on homes and contaminated drinking water.
St. Croix Energy LLLC has been named the bidder for the facility and is currently the only qualified bidder, according to the filing filed with the US Connecticut Bankruptcy Court for the South District of Texas, Division of Houston. The auction is set for Monday, but Limetree’s general counsel on Sunday proposed that it be extended later in the week.
A stalking horse bid is used as a starting bid or minimally accepted bid that other interested bidders must surpass if they want to buy the business.
St. Croix Energy, which describes itself as “a group of businessmen with deep roots in the Virgin Islands,” said in an October press release that it is committed to restarting the refinery safely.
The company is made up of industry professionals with decades of experience in the refining, marketing and renewable fuels sectors, the statement said.
Limetree said she was still working with other qualified bidders. More than 30 parties, including several who have offered to wind up the facility and sell the assets, have performed due diligence, according to the filing.
Some potential buyers, including St. Croix Energy, have previously expressed concern that Environmental Protection Agency requirements will prolong the licensing process and dampen interest in a potential sale.
Buyers could be held responsible for the contamination of newly discovered groundwater near the site and many other unspecified costs, according to a letter from environmental regulators reviewed by Reuters. Read more
Reporting by Laura Sanicola; Editing by Tom Hogue and Peter Cooney
Our standards: Thomson Reuters Trust Principles.