Hedge fund circles Stanlow refinery following court ruling
The Indian owners of the Stanlow oil refinery have been ordered to pay 409 million US dollars (£313 million) in unpaid debts to a US hedge fund, paving the way for the plant’s potential sale.
Essar, which owns the Cheshire site, has lost a High Court battle with Midtown Acquisitions, which is seeking a forced sale of Stanlow as part of efforts to recoup the money it lent to the group.
The court ruled that Essar must stump up the cash, which now totals around 479 million US dollars (£367 million) when accounting for interest.
The Press Association understands that Midtown has applied for a forced sale order of the Ellesmere Port refinery in order to recoup the money, also through the High Court.
The sale order is expected to be enforced by the end of the year, or early in 2019, should Essar not pay up, according to people familiar with the matter.
Essar is ultimately controlled by India’s wealthy Ruia family, while Midtown is controlled by US hedge fund giant Davidson Kempner.
The refinery employs more than 900 workers and an additional 500 on-site contractors, and supplies 16% of all UK road transport fuels.
The legal dispute centres on money lent against Essar’s Minnesota steel mine in the US.
Essar has defaulted on the loan and a New York judgment enforcing the debt obligation has been recognised in the UK following this week’s court ruling.
Midtown is one of a number of parties that lent on the Minnesota project, which is now bankrupt.
If the forced sale of Stanlow goes ahead, the operation would be unaffected and no jobs would be at risk.
Stanlow is one of Britain’s biggest oil refineries and Essar acquired it from Royal Dutch Shell in 2011.
All parties declined to comment.