Nova Plama refinery, which includes Bulgarias only base oil plant, has been slated for auction at the behest of creditors for the bankrupt facility. The refinerys owners are trying to head off the sale, however, by appealing the May decision that declared it insolvent.
An official in the credit department of DZI Bank Plc., Bobi Stoyanov, told Lube Report last week that DZI and Yorset Holding decided to sell the refinerys core assets after determining that liquidators had failed to implement an approved program for paying off creditors.
DZI and Yorset are the principal creditors, holding a combined $64.9 million in bad debt and loans. Most of those loans and debt were originally approved by other Bulgarian banks that folded in the early 1990s.
Nova Plama is located near the north-central Bulgarian town of Pleven and has capacity to process 1.2 million metric tons of crude oil per year, making it the nations second-largest refinery. The facility includes a base oil plant with capacity to make 3,800 barrels per day of Group I stocks. The company claims the base oil plant was the main supplier for much of Eastern Europes lubricant industry until 1996.
DZIs Stoyanov confirmed the refinery was efficient and profitable throughout the 1970s and 80s, but said it fell on hard times in the early 90s, mainly because of bad loans asBulgaria transitioned from a state-controlled economy.
The refinery ceased processing for a period during the mid- to late-90s, but resumed after being purchased by Plama Consortium in 1999. Processing was halted again on the July 2005 order of a district court that declared the refinery bankrupt. That declaration was upheld in May, according to a July 12 article on the Bulgarian news website Dnevnik. The article also stated that the May ruling has been appealed to the Supreme Cassation Court.