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Philly Refinery Sale Expected to Close Next Week for $27.5 Million Less

Reuters, June 19, 2020
Reuters

A sale of the Philadelphia Energy Solutions oil refinery site to real estate developer Hilco is expected to close next week for $27.5 million less than planned, the bankrupt refiner said in a court filing.

Hilco Redevelopment Partners won an auction in January to buy the 1,300-acre (526-hectare) south Philadelphia refinery with plans to transform it into a mixed-use industrial park. It agreed to pay $252 million for the site.

The Chicago-based developers, citing economic uncertainty caused by the coronavirus pandemic and higher-than-expected environmental costs tied to cleaning up PES land, asked to amend the agreement and delay the sale earlier this month, the filing said.

PES agreed to lower the price contingent partly on Hilco finalizing the deal by June 26. The United States Bankruptcy Court for the District of Delaware must sign off on the amended sale agreement.

The refiner shut its 335,000 barrel-per-day refinery, the largest and oldest on the East Coast, and filed for Chapter 11 bankruptcy last summer after a fire at one of its fuel processing units badly damaged the plant and leaked toxic chemicals into the air.

More than 1,000 workers were laid off, including 640 United Steelworkers members. Executives of the company, which had just emerged from a separate bankruptcy at the time of the June 21 blaze, have received millions of dollars in bonuses since the shutdown.

Union workers, who were let go without access to extended health benefits typically given to laid-off employees, will receive several thousand dollars apiece in transition pay after the sale is finalized, according to the original agreement.

It’s not clear whether that amount will be affected by the amended sale agreement.


(Reporting by Laila Kearney; Editing by Jonathan Oatis)

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Copyright 2020 Thomson Reuters. Click for restrictions.

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