17.09.15. Hovensa LLC has filed for Chapter 11 bankruptcy in the US federal court.
The move was anticipated following the agreement announced on Monday that the company had reached agreement to sell the oil storage terminal part of its closed South Shore refinery in the US Virgin Islands for US$184 million to Limetree Bay Holdings, an affiliate of ArcLight Capital Partners LLC.
The refinery company, a joint venture between Hess Corporation and Petroleos de Venezuela (PDVSA), estimated its liabilities at more than $1 billion. The Chapter 11 filing paves the way for the storage assets to be sold.
Any other potential buyers for the property would have to improve on the Limetree Bay Holdings bid in a court supervised process.
However the deal might be still be challenged in court. The Virgin Islands government filed a lawsuit this week against Hess for approximately $1.5 billion, alleging the company violated its contract by shuttering the refinery in St. Croix before the end of the agreed operational period, which expires in 2022.
Late 2014, a proposed deal to sell the refinery to Atlantic Basin Refining Inc was scuppered by the Virgin Islands Legislature which voted 13-2 against the extension of a tax concession to the facility.