(Jamaica Observer, 22.Dec.2021) — News portal, the Virgin Islands Consortium, reports that Jamaica-based West Indies Petroleum (WIP) won an auction for the Lime Tree Bay Refinery with its bid of US$62 million on Saturday, December 18, 2021.
Lime Tree Bay Refinery is located on the south shore of St Croix in the US Virgin Islands. The auction took place in the US Bankruptcy Court for the Southern District of Texas, presided over by Judge David Jones.
The report states that West Indies Petroleum has until January 21, 2022 to close the sale. If it cannot, second-place bidder St Croix Energy will become the default winner.
West Indies Petroleum, incorporated in 2012, is in the ship bunkering business in the Caribbean and Latin American region. It targets growing demand for marine refuelling. It will need additional resources to revive Lime Tree.
Earlier in July, 2021, news agency Reuters reported that Lime Tree Bay refinery landed in US Bankruptcy Court, with experts including bankers, lawyers and restructuring specialists noting that it needs a minimum US$1 billion to enter viability.
Historically, the St Croix-based owners used up US$4.1 billion in trying to revive what was previously “the largest refinery in the Western Hemisphere”, targeting increasing global demand for its products.
The company was shuttered in May 2021 when US environmental regulators identified foul odors and noxious releases as affecting local communities.
The company filed for Chapter 11 bankruptcy protection, needing to restructure some US$1.8 billion in debt.
Previously, bidder St Croix Energy, on November 18 won a first round in bidding for the refinery. However, Lime Tree Bay Refinery through its lawyers filed to reopen the auction, stating that WIP was originally part of the auction, “but its chief executive had fallen ill and needed emergency attention in the days before the auction was set to take place and that prevented the company from proceeding at the time,” this according to the Virgin Islands’ Consortium.
WIP was offering US$30 million cash upfront, which was superior to St Croix Energy’s US$20 million in cash upfront. On Saturday, St Croix Energy bid US$57 million in cash, but WIP’s US$62 million trumped the offer.
In the consortium’s report, it was said that West Indies Petroleum proposed a plan to seek a new agreement with the EPA for restart of the refinery.
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