France backs Egyptian bid for threatened refinery -minister

Fri Feb 8, 2013 1:09am IST

Related Topics

* Swiss firm Petroplus refinery due to close on April 16

* Administrators reviewing last-minute takeover bids

* State backing may factor into ruling

PARIS, Feb 7 (Reuters) - France's government supports an Egyptian takeover offer for the threatened Petit-Couronne oil refinery in Normandy, the industry minister said on Thursday, raising hopes the plant will outlive a mid-April deadline for closure.

The refinery owned by insolvent Swiss company Petroplus is due to shut on April 16 if administrators decide that five bids submitted so far, including the Egyptian one and others by Swiss, Libyan and French firms, do not constitute valid offers.

State backing for an offer by the Egyptian investment company Arabiyya Lel Istithmaraat may factor into the administrators' ruling, as the government says it could if necessary take a minority stake in the refinery to support a takeover.

The Socialist government wants to avoid the refinery's 470 workers being laid off at a time that unemployment is at a 14-year high and factories including ones owned by Goodyear and carmaker Peugeot are threatened with closure.

"The state has decided to stand behind an offer - there was another interesting one (by Swiss firm Terrae International) - to ensure the refinery is taken over," Industry Minister Arnaud Montebourg told LCP Public Senat TV.

"We have had the pleasure of welcoming a slightly unexpected offer, which seems to us to be of good quality, which comes from an Egyptian group of good standing," he said.

Administrators this week poured cold water on hopes of a takeover of the refinery, qualifying the offers so far only as 'expressions of interest'. Bidders have until April 16 to refine the offers, after which the refinery will halt.

The outcome of the bidding process is a test of credibility for Montebourg, who lost face last year when Prime Minister Jean-Marc Ayrault overruled his threat of a state takeover of ArcelorMittal blast furnaces.

He obtained tacit backing from Finance Minister Pierre Moscovici, who said on France Inter radio that the state would consider taking a "minority stake" in the 161,000 barrels per day refinery, which was once owned by Royal Dutch Shell .

The president of Arabiyya Lel Istithmaraat was due in Paris on Thursday for talks bringing together all the players in the refinery's fate, Michel Billard de la Motte, the firm's acting representative in France, told Reuters.

"We have asked for the state to participate in the takeover and we will have a first meeting with the Strategic Investment Fund on Friday," he added, referring to a sovereign wealth fund that invests in companies in France.

The French oil industry had greeted with caution news that low-profile, last-minute bidders had put themselves forward to take over the refinery.

"It would be an absolute catastrophe if there were a buyer which is not solid and serious enough, and that after a few months we end up in a shutdown situation again," Jean-Louis Schilansky, head of French oil lobby UFIP, said on Wednesday.

Shell, which operated the refinery since it was opened in 1929, sold the plant to Swiss refiner Petroplus in April 2008, before Petroplus filed for bankruptcy in January last year. (Reporting by Gerard Bon and Marion Douet; Writing by Nick Vinocur; Editing by Anthony Barker)

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