March 27, 2019 / 8:40 AM / a month ago

Energy trader Mercuria gets green light to buy Aegean Marine Petroleum

LAUSANNE, Switzerland, March 26 (Reuters) - Global energy trader Mercuria Energy Group will be able to acquire bankrupt Aegean Marine Petroleum Network Inc in the coming week after a court approved the plan, Aegean said on Wednesday.

Mercuria was a stalking horse bidder for marine fuel logistics firm Aegean during its Chapter 11 process. Following a ruling by the U.S. Bankruptcy Court for the Southern District of New York, Aegean will emerge from the process as a wholly-owned subsidiary of the Geneva-based trader.

New York-listed Aegean entered the bankruptcy process in November last year after major losses prompted an activist investor revolt to sever ties with the company's founder, shipping and oil tycoon Dimitris Melissanidis.

Prior to that Mercuria had already agreed to extend the ailing firm up to $1 billion in financing. The purchase price was not immediately known.

“With the support of Mercuria and our creditors, Aegean will emerge from the Chapter 11 restructuring significantly deleveraged, having reduced its funded debt by approximately 80%," Tyler Baron, Aegean board director, said.

Mercuria sees the acquisition as key ahead of new rules on shipping fuel by the International Maritime Organisation (IMO) due to take effect next year.

Under the new IMO regulations, shippers will no longer be able to use fuel with a sulphur content above 0.5 percent and instead must run compliant diesel or very low sulphur fuel oil.

Shippers could continue using high sulphur fuel if they install a sulphur filter, known as a scrubber.

The oil industry has called the IMO change a seismic disruption, as it is expected to boost demand for low-sulphur diesel and fuel oil. Trading firms are positioning themselves ahead of the new rules.

“It’s really a way for us to enter, in a more physical way, the bunker (shipping fuel) market. Aegean will be part of our bunkering division Minerva,” Mercuria's chief financial officer Guillaume Vermersch told Reuters.

“Aegean’s system will allow us to control the procurement segment... bringing the oil to ports, monitoring inventories, blending, having tanks - the whole infrastructure.”

Vermersch said it will take three to six months to integrate Aegean fully. (Reporting By Julia Payne, additional reporting by David Gaffen in New York; Editing by Elaine Hardcastle)

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