Moroccan refinery to get capital injection

12 May 2016

Bankrupt refiner could restart production

Saudi Arabia’s Corral Petroleum Holding has agreed to inject $680m into Morocco’s Societe Anonyme Morocaine de l’Industrie du Raffinage (Samir), which is under liquididation proceedings, its lawyers told Reuters.

Corral Petroleum owns 67.3 per cent of Morocco’s only refiner, which is listed on the Casablanca Bourse.

Samir is thought to have total debts of MD44bn ($4.6bn), after it failed to hedge against the decline in oil prices in 2015. This includes $1.4bn owed to the Moroccan tax authorities, as well as debts to oil traders. Samir also secured $700m of project finance in 2006, with a 13-year tenor, from local and international banks including the UK’s Barclays and France’s BNP Paribas, and Italian export credit agency Sace.

Samir plans to restart its 150,000 barrel a day refinery shortly to make it more attractive to potential buyers. It has continued to pay employees since the refinery halted production in August 2015.

Samir has been unable to pay for a 1 billion barrel cargo of crude oil, which has been sitting offshore for several months. It has issued a tender for a further 8 billion barrels to resume production, but oil traders may be wary, according to Reuters.

There is some speculation that Rabat will nationalise the refinery to avoid job losses and having to import all petroleum products.

Corral is seeking legal redress rather than liquidation, and hopes the capital injection will support its appeal against the court process, Reuters continues.

Corral agreed an MD10bn capital injection in October 2015 but this did not take place.

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