Petroplus administrators reveal scale of Coryton’s financial woes

Coryton Oil Refinery in EssexThe joint administrators of Petroplus Refining & Marketing have published their first progress report on the administration, which illustrates the depth of the financial challenges faced in continuing to operate the Coryton refinery.

The report provides creditors with a detailed description of progress that has been made in the six months since the appointment of the administrators.

Trading losses from refining during the six-month period of administration are currently estimated at $22m-$31m, on sales of some $347m. Of this loss, some $20m relates to capital expenditure incurred and written off in the period.

The report also states that an extensive exercise to obtain the best value for creditors from the sale of Coryton found that offers to run the site as a refinery were materially lower than for an alternative use.

It is currently estimated that the net funds available for distribution to unsecured creditors may be in the order of $102m-$135m. Gross realisations from the assets of the company are projected to be $199m-$209m.

Steven Pearson, joint administrator and PwC partner, said: “This has been an exceptionally difficult administration. The information we have published today illustrates the scale of financial and operational challenges we faced in operating the refinery for nearly six months.

“The unfortunate reality is that, despite rigorous cost control, the refinery incurred significant losses from operations between January and June. This high risk, low reward environment was the main driver in having to cease operations – put simply, we could not afford to incur the ongoing losses associated with continuing refining.”

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