Government to invite new bids for sale of Pointe-a-Pierre refinery

The Pointe-a-Pierre refinery. -
The Pointe-a-Pierre refinery. -

CABINET has again rejected a bid by Patriotic Energies and Technologies Ltd to buy the Pointe-a-Pierre refinery owing to an apparent lack of funding. This was said by Energy Minister Franklin Khan at a virtual briefing on Tuesday. Also present was Finance Minister Colm Imbert.

Khan said the refinery would once again be put on the open market to see what bids it might attract.

Imbert said Patriotic, as part of the open market, could send in a new bid.

Khan recalled the Government had rejected Patriotic’s initial bid on October 30, 2020, but, after an appeal by Patriotic, had agreed to let an evaluation committee, chaired by Ministry of Finance permanent secretary Vishnu Dhanpaul, take another look at the bid, but ultimately in vain.

The committee had concluded Patriotic’s relationship with Trafigura to fund the process of re-starting the refinery was workable, but to initially buy the plant the RBC/Patriotic configuration was unworkable, he said. Further, it was not feasible for the Government to fund the removal of the US$500 million lien on the refinery.

Khan said Cabinet on Monday agreed to notify Patriotic it no longer had exclusivity to the acquisition of the refinery.

“The Government will immediately return to the open market to explore all other options,” Khan said.

He said the Government had bent over backwards to facilitate Patriotic’s bid but at the end of the day must also protect the public interest, in light of Patriotic’s inability to source funds to buy the plant.

Khan said despite the Government giving Patriotic terms such as a moratorium plus ten years to pay to buy the plant, the company had problems getting financing.

Imbert said a letter from RBC saying the bank was interested in assisting Patriotic with the opportunity did not satisfy a definition of RBC being a financier.

He said RBC gave no guarantee, no time frame and no terms, so it was not deemed to have made a suitable offer to be a financier.

Imbert said Patriotic has not demonstrated the ability to raise requisite finances.”

He said globally the covid19 pandemic has pushed a lot of players out of the energy sector but now oil prices were going up, adding, “You never know what you’ll find out there.”

Apart from the US$500 million purchase price (which would be used to pay off the lien), Imbert reckoned the cost to restart the refinery would be another US$500 million. Imbert said the refinery would be put back out onto the open market for bids in the next three to four weeks.

Comments

"Government to invite new bids for sale of Pointe-a-Pierre refinery"

More in this section