Philadelphia Energy Solutions filed for bankruptcy protection and reached a financing agreement with debt holders as the fuel-making company grapples with the aftermath of a June explosion and fire at its oil refinery that forced it to shut operations.
The company submitted Chapter 11 petitions at the U.S. Bankruptcy Court for the District of Delaware on Sunday. It also entered into a proposed debtor-in-possession financing agreement with holders of its outstanding term loan debt for up to $100 million, the company said in a statement.
The moves provide the company “with the additional financing and liquidity necessary to ensure we can safely wind down our refining operations,” Chief Executive Officer Mark Smith said in the statement.
It will be the company’s second trip to bankruptcy court in less than two years, after emerging from Chapter 11 in August 2018. Estimated liabilities for this round are as high as $10 billion, according to the recent filings. The East Coast’s largest oil refiner said in June that it was dismissing more than 1,000 workers and shutting its plant, which could process 335,000 barrels of crude oil a day.
A unit of Dallas-based Trinity Industries Inc. holds the largest unsecured claim, of almost $4.1 million, the court filings show. CSX Transportation Inc. and BNSF Railway Co. are the next biggest, at $3.9 million and $3.5 million, respectively.
Last month, a leak at an alkylation unit, which is used to make high-octane gasoline, triggered explosions and fire that stopped the refinery’s Girard Point section. The Point Breeze section -- which had been running at a reduced rate -- was on track to run out of crude by Sunday night, Bloomberg reported July 19.
© 2019 Bloomberg L.P.