By Michelle Caffrey – Reporter, Philadelphia Business Journal
Philadelphia Energy Solutions is filing for Chapter 11 bankruptcy on Sunday for the second time in less than two years, court filings show, after an explosion and fire-ravaged its already financially struggling oil refinery complex in South Philadelphia last month.
The newest attempt to restructure the refinery’s heavy debt load comes on the heels of both PES’ decision to close the complex entirely after the fire, laying off more than 1,000 workers, and efforts by elected officials and union leaders to keep the plant open for a potential sale, although analysts doubt there will be buyer interest.
The two refineries that make up PES’ operation are Point Breeze and Girard Point, which combined make up the largest oil refinery on the East Coast. The explosion occurred at the Girard Point refinery.
In a statement, PES said the company’s entered into a “proposed debtor-in-possession financing agreement with holders of the company’s outstanding term loan debt” that provides up to $100 million in new funding. That funding will make it possible for the refinery to “safely wind down our refining operations and, with the support of our insurers and stakeholders, best position the company for a successful reorganization, the rebuilding of our damaged infrastructure, and a restart of our refining operations,” CEO Mark Smith said in the statement.
Both PES’ assets and liabilities are between $1 billion and $10 billion, the bankruptcy documents show. Its largest unsecured creditor listed is Trinity Industries Leasing Co., which it owes roughly $4 million and CSX Transportation Inc., which is owes about $3.8 million. The full list of the top 50 unsecured credits is largely made up of other industrial vendors. PES states funds will be available to distribute to unsecured creditors.
