Tuesday , June 19 2018

Glencore, Carlyle to rescue bankrupt Moroccan refinery

epa02741395 (FILE) A file photo dated 14 April 2011 shows the company sign and in front of commodities group Glencore International AG in Baar, Switzerland.  The world's largest diversified commodities trader made a strong debut on the initial grey market 19 May 2011, five days ahead of the official launch at the London stock exchange on 24 May and Hong Kong on 26 May 2011.  EPA/URS FLUEELER

LONDON / Reuters

Swiss trading giant Glencore and US private equity investor Carlyle Group have teamed up in an attempt to buy Morocco’s only oil refinery, hoping to recoup about $600 million in loans they issued to the plant before it went bankrupt, industry sources said.
Two sources close to the process said the Moroccan government wanted at least $2 billion for the plant at Mohammedia, on the Atlantic coast near Casablanca. However, no decision on any sale is imminent, due partly to its complex debts.
The 200,0000 barrel per day refinery fell foul of the global oil price crash. It stopped operating in August 2015 after the government froze the bank accounts of its loss-making operator, Samir, seeking 13 billion dirham ($1.35 billion) in unpaid taxes.
If the deal goes through, it would become Glencore’s first oil refinery and allow the plant to restart production, a crucial condition for repaying debts to a wide group of foreign creditors. A Moroccan court ruled last year that Samir should be liquidated despite attempts to restart production by the company, which was controlled by the Corral Petroleum Holdings group of Saudi billionaire Mohammed al-Amoudi.
On top of the unpaid taxes, several large oil companies and trading houses, including Glencore, are owed around $1 billion by Samir. This debt was extended mainly in the form of crude oil which they lent to the refiner in return for repayment in cash or refined products later.
However, Samir became the biggest casualty of the 2014-2015 oil price crash in the Mediterranean region, becoming unable to repay the debts from sales of petroleum products. Glencore, the world’s second largest oil trader after Vitol, has repeatedly insisted the plant needs to restart production so creditors can gradually recoup the money.
It has now joined Carlyle, which already co-owns refineries in Switzerland and Germany with Vitol, in offering to buy the plant, four industry sources familiar with talks said. The sources declined to be named as talks are confidential.
Glencore and Carlyle declined to comment. Mohammed El-Krimi, appointed by a Moroccan court to oversee the plant’s liquidation, said information about bidders and the process was confidential. “I cannot confirm or deny,” he told Reuters.
Glencore has a $200 million prepayment deal with Samir funded by loans from banks Natixis and APICORP. A source familiar with the situation said negotiations to restructure the debt were on hold until there was clarity on the fate of the plant.

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