PdVSA had owned 50.001 percent of Nynas, and that stake had subjected the Swedish refiner to U.S. economic sanctions aimed at punishing the administration of Venezuelan President Nicolas Maduro and pressuring him relinquish control to opposition leader Juan Guaido, recognized by the U.S. and over 50 other countries as Venezuela’s rightful president.
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Nynas, one of the world’s largest suppliers of naphthenic base stocks, blamed those sanctions for financial problems that forced it to file for reorganization in a Swedish court on Dec. 13.
The 35 percent stake divested by passed to an independent Swedish foundation created specifically to allow Venezuela’s national oil company to reduce its holding. Nynas did not say whether the foundation is intended to keep that stake or if it is just holding it until a more long term investor steps in. Officials did say that the divestment will allow Nynas to complete its reorganization and that the company must report any future change in ownership to OFAC as long as sanctions against PdVSA remain in place.
Finnish oil company Neste still owns the remaining 49.999 percent of Nynas.
The lifting of sanctions means U.S. companies no longer require an authorization from OFAC to engage in transactions or activities with Nynas.
“This means an end to many years of having to carry the unfair burden for a Swedish company of being subject to U.S. sanctions. This led to an increasingly deteriorating financial situation, which ultimately forced Nynas into reorganization at the end of last year,” said Nynas President Bo Askvik. “Our focus now is to successfully end the ongoing reorganization process and having exited sanctions Nynas will be able to return to normal trading conditions and secure long-term financing.”
As part of its reorganization, Nynas sought to reduce PdVSA’s stake in the company, and the ownership change was approved by OFAC, Nynas said in a press release issued May 12.
“Under the terms of the restructuring of Nynas’s shareholders and board of directors reviewed and approved by OFAC, PdVSA has reduced the percentage of Nynas shares it owns to 15 percent of all shares currently issued,” the company said. “The 35 percent divested by PdVSA are now controlled by an independent Swedish foundation under no influence by PdVSA, established to enable a reduction in PdVSA’s ownership interest.”
Through its December filing with the Swedish court, Nynas gained temporary relief from loan repayments. In March the company secured an extension to its reorganization, which usually last in three-month periods.
“Since [Dec. 13], Nynas has made good progress with the reorganization process. With the now confirmed statement regarding sanctions relief from OFAC, both Nynas and the administrators believe that the basis exists for finalizing the reorganization successfully,” the company said. “As Nynas now is out of sanctions, financing is available to secure necessary crude oil purchases going forward.”
Nynas operates two naphthenic base oil plants in Europe: a 400,000 metric tons per year facility in Nynashamn, Sweden, and a 330,000 t/y plant in Harburg, Germany.