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French refinery headed for closure as court rejects bids

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(Globalpost/GlobalPost)

A commercial court on Tuesday decided to end the near 85-year-old saga of a troubled French refinery by rejecting final bids to save it, saying that the proposed business plans were simply not strong enough.

"Unfortunately, the investors have not been able to eliminate all the ambiguities and doubts in the offers. As a consequence, the court had no choice but to reject the offers presented today," works committee lawyer Jean-Pierre Valentin told reporters.

The Petit-Couronne refinery said in a statement that lay-offs of the 470 staff would start "in the coming days".

The medium-sized plant in Normandy has been under pressure to find a new owner for more than a year after its Swiss owner Petroplus filed for bankruptcy in January 2012.

Placed under insolvency administration in October, it became a symbol of France's struggle to try to keep industrial sites running in the face of a stagnant economy and stiff global competition.

Several unions had raised the possibility of nationalisation for the Petroplus site in recent months but the government has said it would only be prepared to take a minority stake alongside a buyer with a firm base in the sector.

In a statement, Industrial Renewal Minister Arnaud Montebourg and Labour Minister Michel Sapin said the government had "taken note" of the court decision, and vowed to support the staff, while emphasising that "all possible means" had been made to try to find a buyer.

The statement added that "nothing could have been worse" than an unsustainable solution.

Outside the court, protesters cried "nationalisation" and carried banners that read: "No to the death of refining".

Although dozens of smaller industry players had shown interest in buying the plant, none were able to present sufficient evidence that they had the capacity to turn it around and make it profitable again.

In desperate attempts to find a solid owner, the court had postponed the offer deadline a total of eight times.

The two final bids came from Panama-registered NetOil and Libya's Murzuq Oil.

None of the sector's key players, such as ExxonMobile, Total, BP or Shell made offers however, as margins within European refinery operations are considered to be low owing to fierce competition from imported products.

Yvon Scornet, spokesman for a joint union initiative, said "it takes 15 million euros ($20 million) worth of crude oil per day to feed a refinery like ours and 400-500 million euros to make the necessary investments on the site".

Opened in 1929, the Petit-Couronne plant outside Rouen was sold to Petroplus in 2007 by Anglo-Dutch company Royal Dutch Shell.

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http://www.globalpost.com/dispatch/news/afp/130416/french-refinery-headed-closure-court-rejects-bids