The largest refinery complex on the East Coast filed for Chapter 11 bankruptcy protection in Delaware.
Bankrupt Company News reported the filing from Philadelphia Energy Solutions, comes after long-running reports of financial stresses on the South Philadelphia site. The Delaware Bankruptcy Court site indicated the filing was made on Friday.
Philadelphia Energy Solutions earlier dropped plans for a public stock offering while seeing its credit rating cut.
Bankruptcy Company News indicated that the company has a “pre-packaged” bankruptcy plan that typically includes agreements with large debt-holders. Companies typically use the Chapter 11 process to deal with smaller debt holders.
The plan would inject capital into the refinery complex and cut interest costs, filings indicated.
Energy Solutions is owned by a private equity firm and a limited partnership.
The company also reported that it is struggling with the impact of the renewable fuel standards and the system in place that tracks corn-based ethanol.
The renewable fuel system has come under criticism from the industry, which includes Delaware’s lone refinery, owned by PBF Energy. Efforts to reform the system have not occurred, following opposition from senators and congressional representatives in “Corn Belt” states.
PBF, which got is start with the purchase of a refinery in Delaware City, went on to purchase other refineries around the nation, but none the size of the Philadelphia complex.
The former Valero refinery in Delaware had been shut down and was in danger of demolition before PBF acquired the site with the help of a state financial package.
PBF has remained solidly profitable, thanks in part to refineries like Delaware City that can process heavy and light crudes.
PBF has also remained flexible in finding supplies of crude oil, building a large rail terminal to handle shipments from North Dakota and Canada. The volume of crude from those sources has dropped but may pick up as prices rise.
Philadelphia Energy Solutions consists of two refineries four miles away from the stadium complex. The industrial setting that includes auto salvage operations in the area is often used in visuals emphasizing the blue-collar roots of the city.
