Future of Stanlow oil refinery uncertain as hedge fund calls for sale

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The owner of one of Britain’s biggest oil refineries could be forced to sell the plant as a legal spat over unpaid debts intensifies.

The Press Association understands that Midtown Acquisitions is seeking a forced sale of the Stanlow oil refinery in Cheshire as it looks to recoup over 400 million US dollars (£304 million) lent to Essar, the owner of the site.

Essar is ultimately controlled by India’s wealthy Ruia family, while Midtown is controlled by US hedge fund giant Davidson Kempner.

A legal dispute over the 400 million US dollars – lent against Essar’s Minnesota steel mine in the US – has been playing out in the UK’s High Court.

Essar has defaulted on the loan and lawyers for Midtown expect to have a New York judgment enforcing the debt obligation to be recognised in the UK within weeks.

The process of applying for a forced sale order of the Ellesmere Port refinery through the High Court is already under way.

The refinery employs more than 900 workers and an additional 500 on-site contractors, and supplies 16% of all UK road transport fuels.

Matthew Getz, of Boies, Schiller & Flexner and acting for Midtown, said: “Midtown takes this case very seriously. On behalf of its investors, we will pursue all available legal remedies worldwide to recover on its debt from Essar.”

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, people close to the situation told PA.

Stanlow is one of Britain’s biggest oil refineries and Essar acquired it from Royal Dutch Shell in 2011.

Last month a major fire broke out at the plant, and it later transpired that the blaze started inside a manufacturing building.

Davidson Kempner declined to comment and Essar did not respond to request for comment.

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