A worker exits Limetree Bay Refinery at the lunch hour on May 25. Restarted under new ownership in February after eight years in mothballs, the circa 1960s plant was beset with process equipment and operator failures, culminating in an indefinite shutdown and bankruptcy filing. (Source file photo by Patricia Borns)
In my last newsletter of 2021, I congratulated the winning bidders for the closed Refinery here in St Croix – the St Croix Energy Group (SCE). Well….as the island turns, a SECOND auction was approved because Jamaica-based West Indies Petroleum (WILP) offered significantly more money and was subsequently the top bidder at the second bankruptcy auction held on December 18th. The deal was confirmed and everyone was on board with the new owners. But on December 21, West Indies Petroleum CEO admitted to the court that his company didn’t actually have the $30 million cash on hand to complete the purchase. Rut Row.
But wait…. there’s more! According to an article in the VI Consortium, West Indian Petroleum was only worth about $8 million in December 2020, has low margins, has multiple loan defaults on their books, and might not be able to finance the $60 million needed to complete the purchase of the refinery. The company is also apparently in trouble with the government back in Jamaica.
So the saga continues. SCE has reportedly filed an appeal with the Texas bankruptcy court. All this as an end-of-January deadline for WIPL to finalize the sale quickly approached. As of this writing, still nothing definitive.
Meanwhile, the Limetree Bay Terminals continue to grow. The following is from their website:
“St. Croix, U.S. Virgin Islands (January 11, 2022) – Limetree Bay Terminals, LLC (the “Company”) today announced that it has completed additional financing transactions in connection with the financing arrangement announced on August 2, 2021, as existing investors including a group of the Company’s term loan lenders have upsized their capital investment in the company by $55 million, bringing the total amount of capital provided under new financing arrangements since August 2021 to $105 million.
“This enhancement to the financing arrangement first announced in August 2021 provides the Company with the capital needed for success as we enhance our capabilities and invest in our world-class facilities here in St. Croix”, said Jeffrey Rinker, Limetree Bay Terminals’ CEO. “We are very encouraged by this strong vote of confidence from our investors in our workforce and our business plan.”
Over the past six months, the Company has repositioned its business to be independent of Limetree Bay Refining (which suspended operations) and continues to operate without interruption. “Progress has been made in attracting new customers to the terminal and securing new contracts”, said Rinker. “We expect significant opportunity for more re-contracting, operational efficiencies and growth in the year ahead.”
Limetree Bay Terminals was advised over the past half-year by Evercore as investment banker and Alvarez & Marsal as financial advisors. These advisory engagements have now been successfully concluded. Hunton Andrews Kurth, LLP served as legal counsel to Limetree Bay Terminals for the transaction. The HoldCo lenders were advised by Vinson & Elkins LLP as legal counsel and Houlihan Lokey as investment banker. An ad hoc group of senior lenders to Limetree Bay Terminals was advised by Davis Polk and Wardwell LLP as legal counsel and PJT Partners LP as investment banker.