Bankrupt Limetree Bay refinery gets $10m debtor funds in possession to relax

Aug 11 (Reuters) – The Limetree Bay refinery can secure an additional $10 million in debtor-in-possession (DIP) financing this month, a Houston bankruptcy court judge ruled on Wednesday, money that will go to the outcome of the operations.

The St. Croix refinery in the US Virgin Islands filed for bankruptcy in July after investors poured $4.1 billion into an unsuccessful revival of the aging facility. An early restart had to be scrapped after its chimneys spewed oil onto homes and contaminated drinking water.

The 210,000 barrel per day refinery is expected to receive up to $25 million in bridge financing while seeking to restructure nearly $2 billion in debt. So far, he has received $5.5 million from lender DIP Arena Investors LP.

On Monday, Jefferies Financial Group Inc said it had not found a buyer for the facility despite contacting multiple parties. But Jefferies’ U.S. restructuring co-head Michael O’Hara said if a buyer was found there were parties available to replace BP Plc as the facility’s crude supplier. .

“I’m counting on O’Hara to bring me a buyer,” U.S. Bankruptcy Court Judge David R. Jones said Wednesday.

The company sought money to pay workers to remove oil from the nearly closed facility and to reimburse former employees for travel expenses.

U.S. prosecutors are investigating potential criminal violations of the Clean Air Act, Limetree bankruptcy attorney Elizabeth Green said Monday.

The investigation deterred potential investors, Limetree’s lawyers said.

Judge Jones, who is a veteran of refinery restructurings in court for the Southern District of Texas, said in July that he was concerned about Limetree’s ability to get through Chapter 11 on the existing DIP loan.

“I don’t think there’s an alternative,” Jones said Wednesday.

The process of dismantling the refinery will take several months, the owner of the company, a consortium led by EIG Global Energy Partners, told the Texas court this month. (Reporting by Laura Sanicola; editing by Gary McWilliams and David Gregorio)