Probex Corp. announced last week that it has widened the search for financing options for a $130 million used oil reprocessing plant it plans to build in Wellsville, Ohio.
The Dallas company also reported that an insurance instrument designed to protect senior lenders has expired. It is now trying to renegotiate the instrument, which is needed for the project tomove forward.
Probex plans for the Wellsville plant to use its ProTerra technology to reprocess used lubricants into base oils that perform on par with premium virgin stocks but that have the economic advantage of recycled oil. Financing is the last major hurdle to the start of construction.
Previously the company said it planned to use debt/equity financing to pay for the project. Now it is also considering a lease transaction and a traditional debt transaction. Officials said that either of the new options would benefit shareholders by causing less ownership dilution than originally anticipated.
Probex lost its technology and market risk facility with Swiss Re Financial Products Corp. because it did not obtain financing before an agreed-upon expiration date. The risk facility is supposed to protect senior lenders from certain deficiencies attributable to the technology or from adverse market conditions.