Hovensa’s owners have reached a deal with Limetree Bay Holdings LCC, an affiliate of ArcLight Capital Partners LLC, for sale of the refinery’s oil storage, racking and docking facilities.
Hovensa is owned by Hess Oil Corporation and PDVSA VI, a subsidiary of Venezuela’s national oil company, Petroleos de Venezuela. According to Hess, the purchasing price for the terminal segments is $184 million.
The owners of Hovensa Thursday confirmed that Limetree Bay Holdings LLC is a “stalking horse” bidder for in the Chapter 11 process to sell its St. Croix facility.
According to a news release issued Thursday, the company received approval from the U.S. Bankruptcy Court for the District of the Virgin Islands to designate Limetree. The court also approved bidding procedures that will be used to evaluate other potential offers for Hovensa’s terminal and/or refinery assets and approved the company’s $40 million Debtor-in-Possession financing facility, which will be used to safely maintain Hovensa assets in an idled state in support of a successful sale.
According to the investing website Investopedia, a stalking horse bid is an initial bid on a bankrupt company’s assets from an interested buyer chosen by the bankrupt company. From a pool of bidders, the bankrupt company chooses the stalking horse to make the first bid.
According to the bidding procedures approved by the court, other parties can propose a purchase of the terminal business or a purchase of the entire Hovensa business through 5 p.m. Nov. 5. All offers will be considered, and if another qualified bid is received, the bids will be evaluated in a Nov. 10 auction. Hovensa will present the highest or otherwise best offer for approval by the U.S. Bankruptcy Court.
Among the factors that will determine the outcome of the sale will be whether the V.I. government and the buyer can negotiate an operating agreement and approval of that agreement by the V.I.. Senate and the court.
“We appreciate the court’s careful consideration of all points of view and look forward to efficiently completing the sale process as outlined in today’s court orders,” said Thomas Hill, Hovensa’s chief restructuring officer.
“All interested parties are encouraged to come forward with their offers for Hovensa’s assets and all bids will be evaluated through a fair and efficient process to ensure Hovensa is able to maximize value for its creditors. We remain hopeful that a successful sale can be completed before the end of the year and are working diligently toward that goal.”
Hovensa’s Chapter 11 case is being heard in the District Court of the Virgin Islands, Bankruptcy Division and is administered under Case No. 15-10003.
Copies of all of the related court filings are available at https://cases.primeclerk.com/hovensa, or can be requested by e-mail at hovensainfo@primeclerk.com. For more information on participating in the sale process, bidders may contact andrew.j.chang@lazard.com.
