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Funds are there to seal Lindsey Oil Refinery sale as a going concern – Total

Concerns over ongoing financial support for Total Lindsey Oil Refinery appear to have eased as bosses continue to work towards its sale.

The end of the month had been flagged as a deadline for a £170 million loan maturing – cash that has been provided by the French parent company, helping to see the huge Humber bank plant through the Covid-inflicted downturn.

A deal to dispose of the 52-year-old refinery was agreed in July, with accounts published in December revealing its reliance on Paris.

Prax Group had hoped to complete the acquisition by the end of 2020, with 400 employed at North Killingholme and a strong contractor input too.

LOR general manager Thomas Behrends had voiced his “reasonable expectation” that funding would be continued in the report, and that appears to be the case as the physical barrier the pandemic has brought is overcome and the scale of the impact Covid has had on the industry is assessed as part of the completion.

The material uncertainty was laid bare in the strategic report, with Mr Behrends detailing how an extension would be sought if the deal did not finalise. He told how it “may cast a significant doubt on the company’s ability to continue as a going concern” is funds did not flow across the Channel.

Thomas Behrends, general manager and director of Total Lindsey Oil Refinery.

Coronavirus travel restrictions and subsequent lockdowns have hit the fuel sector hard, with car use and aviation curtailed.

Asked about the situation with a week left before the published deadline, a spokesperson for the energy giant said: “Total continues to work with Prax to conclude the deal to sell Lindsey Oil Refinery, at which point the conditions attached to the loan will have been met.”

Recent years have seen a major emphasis on the business remaining in the group, having been marketed previously then retained.

A ‘Future In Total’ badge was given to a major reorganisation of the refinery, that saw headcount brought down from 580, alongside significant plant investment as it went to single stream in 2016.

The demand lull comes when least desired, midway between turnaround cycles – the significant maintenance events. The last completed in 2019, with the next looming in 2023.

Prax owns the Harvest Energy fuel brand and has 950 employees working across seven countries, from upstream services in exploration for oil and gas to transporting and selling.

When the agreement was announced, it said it would place the refinery at the heart of its strategic network.

The deal includes the distribution terminal and the Finaline – a high pressure pipeline linking Lindsey to the huge Buncefield terminal and on to Heathrow Airport.

It comes as Total was revealed as a successful bidder in the latest offshore wind round – with a project off the Lincolnshire coast.

The post Funds are there to seal Lindsey Oil Refinery sale as a going concern – Total appeared first on USNewsRank.

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