PES Energy Inc. and its subsidiaries—including its principal operating subsidiary Philadelphia Energy Solutions Refining & Marketing LLC—have filed for Chapter 11 federal bankruptcy protection. PES also reported that it has entered into a proposed debtor-in-possession financing agreement for up to $100 million of new funding with holders of its outstanding term loan debt.
Different agencies began formal investigations on June 24 into the cause of an explosion and fire that broke out early on June 21 at the company’s combined 335,000-b/d refining complex in Philadelphia. After the fire was extinguished on June 23, a gas valve fueling the fire was shut off and the tank involved in the explosion and fire was isolated, the City of Philadelphia said in a release (OGJ Online, June 24, 2019).
“This proposed financing provides the company with a strong financial foundation to support existing operations, undertake the work necessary to ensure the refinery complex is safely positioned for rebuilding, and restart and complete its reorganization process,” the company said.
With the proposed financing agreement, PES said it will work with stakeholders toward a restructuring under a Chapter 11 plan. It expects to establish an orderly process for the evaluation of a range of potentially value-maximizing transactions in the weeks ahead and to work expediently with its insurers, stakeholders, and third parties toward the goal of reaching a consensual plan, rebuilding the damaged infrastructure, and resuming operations.
Contact Nick Snow at [email protected].