May 20, 2019, 12:05 / Updated May 20, 2019, 11:03 / Business

Antipinsky Oil Refinery filed for bankruptcy

Now applicants for the largest independent refinery in Russia will be able to buy the asset only during bankruptcy proceedings Vitaly Petlevoy

On May 18, Russia's largest independent Antipinsky Refinery sent an application to the Tyumen Arbitration Court to declare it bankrupt, a representative of the plant said. This information was confirmed by a court representative. The reason for bankruptcy is that the refinery cannot pay its debts and current loans.

At the end of April, the plant sold 1020 tons of diesel fuel through the St. Petersburg International Commodity Exchange, received money, but was unable to deliver $730,000 worth of goods to customers on time. The total debt to banks is estimated at $5 billion, the largest creditor is Sberbank , on which accounts for about $3 billion, say three Vedomosti interlocutors close to the enterprise.

“The main task for the management of the Antipinsky Refinery is to preserve jobs and provide social benefits even during bankruptcy proceedings,” said the plant’s general director Maxim Andriasov. How he plans to do this in bankruptcy conditions, he does not specify.

According to Andriasov, the company went bankrupt due to the actions of buyers of the company’s products: “Most of the deals were concluded before my appointment in November 2018 under off-take contracts. At the beginning of this year, buyers refused to make prepayments for the products of the Antipinsky Refinery, and it was these prepayments that were supposed to replenish working capital for oil purchases.” “Unfortunately, in 2019, a number of traders, including VTB Commodities Trading (“ VTB’s subsidiary” ) violated agreements and stopped providing advances, which led to a decrease in the amount of purchased oil and, as a result, the plant was stopped on April 26 for recycling,” – notes a representative of the Antipinsky Oil Refinery.

At the end of April, VTB Commodities Trading filed a lawsuit in the High Court of London, in which it demanded to freeze the assets of the Antipinsky Oil Refinery in the amount of 225 million euros, and the court granted the request.

A VTB representative notes that “the statements made by the Antipinsky Oil Refinery representative are untrue and deliberately misleading. VTB stopped financial support for the plant due to the fact that the Antipinsky Refinery did not fulfill contractual obligations for several months. Moreover, VTB made advance payments to the plant for the purchase of petroleum products, which the Antipinsky Refinery sold to third parties and, violating agreements with VTB, did not deliver this cargo to the bank.”

The actions of VTB Commodities Trading led to the impossibility of any other options for the recovery of the enterprise other than bankruptcy, a representative of Sberbank said.

The Antipinsky Oil Refinery can process up to 9 million tons of oil per year; the company mainly purchased oil from Surgutneftegaz, according to Vedomosti’s source close to the plant and two oil and petroleum products traders. A company representative does not say where Surgutneftegaz redirected oil flows after the plant was shut down. In 2018, the company produced 5.9 million tons of petroleum products, the majority – 2.1 million tons – of diesel fuel, recalls Sergei Yezhov, chief economist at Vygon Consulting. “Most of the company’s products - 5 million tons - were sent abroad; production in the first quarter of 2019 was only 850,000 tons. One of the options to save jobs is to start the plant again, but use, for example, a tolling scheme, in which the company will work on someone else’s raw materials for a small margin,” says Yezhov.

“In the event of bankruptcy, the plant will not be sold as a single property complex,” says an employee of one of the creditors of the Antipinsky Refinery. If bankruptcy proceedings begin, the company's activities will be stopped for at least two years, he believes. It won’t be possible to produce anything: oil companies will not supply oil to a bankrupt plant without prepayment, Vedomosti’s interlocutor argues.