Court suspends Petrobras tax order

MOSCOW (MRC) -- Petrobras, Brazilian state-run energy giant, has won a reprieve after a Brazilian court suspends an order for the company to pay USD3.4 billion back taxes, as per Upstreamonline.

A Brazilian appeals court reversed itself and suspended an order requiring state-led oil company Petrobras to pay 7.39 billion reais (USD3.4 billion) in back taxes, a court statement said.

Without the suspension on Friday, Petrobras would have to pay the debt before its appeal of the assessment is complete, Reuters reported.

This would drain scarce cash and likely force an increase in debt if the company wants to meet a USD237 billion five-year investment plan, the world's largest corporate spending programme.

The amount owed is equal to nearly 40% of the company's record USD11 billion bond sale in May and would serve to pay for more than four of the seven floating oil production platform systems the company plans to install in offshore fields this year.

If left unpaid, the debt would prevent Petrobras from bidding at auction in October for the giant offshore Libra prospect and would prevent the company from obtaining licenses to import or export fuel, according to Reuters.

The court, which rejected a request to suspend the payment on Thursday, has frozen the payment order until it can more fully debate the original suspension request, a statement from the court in Brasilia said.

Under Brazilian law companies that have final debt-payment orders against them from the federal Treasury are unable to receive many and services benefits from the government.

As MRC wrote previously, earlier this year, Petrobras Chief Financial Officer Almir Barbassa said that the company expects to raise about USD20 billion in 2013 from debt issues and bank loans to fund the company's ambitious USD237 billion multi-year investment plan. Petrobras will tap global debt markets to finance its latest five-year investment plan that covers the 2013-2017 period.

Petroleo Brasileiro S.A. or Petrobras is a semi-public Brazilian multinational energy corporation headquartered in Rio de Janeiro, Brazil. It is the largest company in the Southern Hemisphere by market capitalization and the largest in Latin America measured by 2011 revenues.
MRC

MOSCOW (MRC) -- PetroLogistics LP (the "Partnership"), the dedicated American prolylene producer, has announced that it has successfully completed repairs to its propane dehydrogenation facility, reported the company in its press-release.

The facility resumed propylene production on 18 June, 2013.

Total costs for all completed repairs will be less than USD2.5 million.

As MRC informed previously, the company had temporarily brought down its propane dehydrogenation facility on Saturday, June 8, 2013, for repairs pertaining to two of the eight reactors at the plant. While the facility was down, the company also completed certain other maintenance items.

According to the company's statement, the company anticipates total Q2 sales of approximately 260 mln lbs of propylene, due to the declared force majeure.

PetroLogistics LP is a limited partnership, which owns and operates the only U.S. propane dehydrogenation facility producing propylene from propane. The Partnership's headquarters and operations are located in Houston, Texas.
MRC

MOSCOW (MRC) -- Spain's La Seda de Barcelona, LSB, which makes plastic bottles in Europe, Turkey and North Africa, said on Monday it would begin insolvency proceedings after failing to reach a deal with creditors, said Reuters.

A record 2,500 Spanish companies squeezed by a deep recession filed for insolvency in the first three months of this year, hurting lenders as they take ever bigger provisions against losses on loans, eating into profits.

Catalonia-based LSB said it has been in talks with its lenders since September last year after its business ran into trouble because of high raw materials costs and excess supply of the PET plastic containers that it makes.

La Seda had a debt load of just EUR600 million (USD800 million) at the end of 2012, including debt to providers, according to company filings.

U.S. hedge fund Anchorage is La Seda's single biggest creditor, after it bought 37% of the company's syndicated loans on the secondary market, a source familiar with the restructuring talks said.

The group has EUR462 million in syndicated loans from banks, according to Reuters loan market news and analysis service RLPC. Of that, a EUR235 million portion needed to be restructured, the source close to the talks said.

Portuguese banks Caixa Geral and BCP are also big lenders, while HSBC and Spain's nationalised Catalunya Banc also feature among prominent creditors.

RLPC reported in late May that La Seda would face insolvency if creditors failed to back a restructuring plan put forward by Anchorage, which offered to inject EUR30 million in the business in exchange for 82% of its equity.

La Seda de Barcelona said in a statement that a refinancing plan had failed to get the backing it needed from 75 percent of creditors.
MRC

MOSCOW (MRC) -- In an update on its current business situation, insolvent PVC producer Kem One - the spun-off Arkema business - said production has returned to near-normal levels at all of its plants, following the resumption of ethylene supply, said Chemanager-online.

As part of a compromise agreement in the long-running dispute between the company's former owner Arkema and its current owner, Swiss-based Klesch, over the state of the business's finances at the time of acquisition a year ago, the insolvency administrator asked Arkema's parent, French oil and petrochemical producer Total, to continue ethylene supply at a rebate against the contract reference price.

Noting that the insolvency proceedings initially due to be concluded in mid-June are "on schedule," Kem One - without naming names - hinted that "several potential buyers" have shown interest in the company. Also without naming names, it added that the financial situation is improving, thanks to the support pledged for the duration of the proceedings.

Arkema had promised the insolvency administrator and the French government to contribute EUR68 million to keep the PVC producer afloat until a new owner has been found. In April, reports said EUR105 million was regarded as necessary to keep production going for a six-month period.

Kem One also praised its customers for their confidence and employees for their dedication. The entire workforce is committed not only to maintaining a high level of customer service but also to finding sustainable solutions for the group, it said. Earlier this year, the company's unions made headlines by setting tires afire in front of production facilities and corporate headquarters.
MRC

MOSCOW (MRC) -- Foster Wheeler has signed a cooperation agreement with Clariant and Wison Engineering to build a pilot plant to demonstrate Foster Wheeler’s VESTA substitute natural gas (SNG) technology, according to Hydrocarbonpocessing.

The pilot plant will be constructed in China and is planned to go on-stream during 2013. The plant will be operated by Wison Engineering.

Under this agreement, Wison Engineering will provide engineering and construction services, Foster Wheeler will license the technology, and Clariant will supply the proprietary developed catalyst.

"This exciting technology provides optimized solutions to secure future clean energy in China," said Stefan Heuser, general manager of Clariant's catalysts business. "We are very pleased to have Wison Engineering with its outstanding reputation and impressive recent development to join Clariant and Foster Wheeler as our strong partner in China."

"By leveraging Foster Wheeler’s global expertise and technological strength as well as Clariant’s strong innovation in catalyst technology, we’ll continue to build up our capabilities in coal-to-chemical sector and will be well positioned to seize the favorable market opportunities in the domestic and overseas markets," said Liu Haijun, senior vice president of Wison Engineering.

The cooperation agreement also sets out a framework for long-term cooperation to deliver and build methanation plants in China based on VESTA technology.

Foster Wheeler says its VESTA SNG technology is a novel methanation technology designed to produce SNG from synthesis gas obtained from gasification of either coal or petroleum coke. The VESTA technology is based on once-through operation with no recirculation, avoiding expensive compressors, and is designed to be simple and safe to operate and to be implemented at a low total investment cost, according to company officials.

We remind that, as MRC reported previously, in early 2013, Lanxess had awarded a subsidiary of Foster Wheeler's Global Engineering and Construction Group an engineering, procurement and construction management (EPCm) contract for a new ethylene propylene diene monomer (EPDM) rubber plant to be built in Jiangsu Province, China.
MRC