Provides history of the refinery, more details) By Jessica DiNapoliAug 1 (Reuters) – Philadelphia Energy Options LLC, the proprietor of the largest U.S. East Coast oil refining advanced, has employed an investment bank to help deal with its debt burden, as it struggles with low profit margins, people accustomed to the matter stated on Tuesday. The move underscores the challenges going through some East Coast refineries, which used to enjoy a competitive benefit when oil costs had been high as a result of they were in a position to secure supplies cheaply by rail. The crash in oil costs has changed that. Philadelphia Energy Solutions’ newest woes come 5 years after private fairness agency Carlyle Group LP <CG.O> and Vitality Transfer Companions LP’s >ETP.N> Sunoco Inc rescued the refinery owner from bankruptcy, in a deal supported by tax breaks and grants that saved thousands of jobs. The refinery complex remains to be one of the area’s largest employers, and U.S. power officials have warned that its closure could lead on to cost spikes on the pump and even threaten the nationwide security pursuits. Philadelphia Energy Options has tapped investment financial institution PJT Partners Inc >PJT.N> for recommendation on dealing with its near-term debt maturities, together with a $550 million loan that comes due in 2018, said the sources, who spoke on situation of anonymity as a result of the hiring has not been made public. The corporate additionally has a revolving credit line that comes due in 2019. “Philadelphia Energy Solutions is currently assessing its capital construction with the objective of improving financial flexibility in light of present market and regulatory challenges that have affected the company’s profitability,” the corporate stated in a press release to Reuters. “We’re working constructively with our lenders to search out a solution that will enable us to maneuver forward with the right financial basis to assist our business into the future. While these discussions are ongoing, operations are unaffected and it stays business as normal,” the assertion added. The company did not touch upon the hiring of an out of doors adviser and PJT Companions and Carlyle declined to comment. Sunoco, meanwhile, did not instantly reply to a request for remark. Philadelphia Power Solutions owns two refineries, Girard Point and Level Breeze. It may possibly convert approximately 335,000 barrels of crude oil per day to products equivalent to gasoline, jet fuel and diesel, and it employs about 1,100 individuals. East Coast refiners have lower revenue margins than their peers in different parts of the United States, largely because of their present reliance on crude imports from West Africa and other markets. As well as, a lot of them have been struggling with prices imposed by environmental regulations, which pressure them to spend cash on renewable vitality credits. Philadelphia Vitality Solutions turned robust profits in 2014 and 2015, thanks to investments in rail terminals that allowed the refiner to herald discounted Bakken crude oil in mile-long trains from North Dakota. However the boom turned to bust by the tip of 2015, as oil costs plummeted and the discount for North Dakota crude disappeared. The fallout hit oil and fuel explorers and producers exhausting, with scores of them akin to Linn Vitality Inc >LNGG.PK> and Breitburn Energy Companions LP >BBEPQ.PK> filing for bankruptcy final yr. Carlyle, which invested $175 million in 2012 in alternate for two-thirds of Philadelphia Power Solutions, withdrew its plans to take the corporate public final yr at an expected valuation of $1.3 billion. Carlyle also tried to sell Philadelphia Energy Options final year.
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