HOVENSA has potential buyers
Published: April 25, 2014
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Viable potential buyers have expressed interest in purchasing the shuttered HOVENSA refinery on St. Croix's South Shore, and the process of trying to sell the refinery is moving forward, according to senators who met with the governor on Wednesday.
Senators who spoke with The Daily News about Wednesday's meeting at Government House on St. Thomas said that few specifics were discussed, because much of the process at this point is confidential.
However, they said officials are hopeful that a sale could be in the works by the end of the year.
"I do feel confident and feel good that the sales process is progressing as it should," Sen. Nereida Rivera-O'Reilly said after the meeting. The names of the interested potential buyers were not mentioned, she said.
"There are potential buyers and the inspection of the plant - that process is beginning shortly," she said as she described what senators were told Wednesday. "I think that's very good news. That's way more than we knew six months ago."
Senators were asked not to talk publicly about some aspects of Wednesday's discussion because of the sensitive nature of the process at this time, she said.
Attorney George Dudley, who is local counsel for HOVENSA, Hess Oil Virgin Islands Corp. and PDVSA, told The Daily News that the sales process for the refinery is ongoing with Lazard, the investment banker HOVENSA hired to sell the refinery.
Dudley outlined the process, saying that the names of parties that contacted him or the government with interest in the refinery have been forwarded to Lazard.
According to a statement Government House released in December, Lazard also planned to market the refinery through its offices in New York City, Houston and Paris, to capture a wide group of potential buyers.
Dudley said that Lazard is vetting those potential buyers and will invite some of them to tour the refinery.
After the tours, those parties would then submit their bids or proposals for the purchase of the refinery if they're interested, Dudley said.
Rivera-O'Reilly said senators were told that officials expect the tours of the plant to start in May.
"I was very happy to hear that the physical inspection of the facility is beginning," she said.
Sen. Judi Buckley said the meeting with the governor went well.
"Unfortunately, much of the information was confidential, but we learned that the sales process is proceeding as planned," she said in a written response to a Daily News inquiry. Senators also learned that there are viable potential buyers, according to Buckley.
Sen. Sammuel Sanes said he felt good about the discussion.
"There's not much I can say. It's confidentiality involved," he said. "But we're very optimistic."
Sanes, Buckley and Rivera-O'Reilly said that officials hope to see movement on a sale by the end of the year.
"If all goes well, we were told we could see a sale later this year," Buckley said.
Government House spokesman Jean Greaux Jr. said that Gov. John deJongh Jr. called the meeting with the 30th Legislature on Wednesday to keep senators abreast of what is happening with HOVENSA.
"It's not a meeting called to reveal any major announcements about the refinery," Greaux said. "I believe the sales process is ongoing. This is just part of the governor's commitment to keep the 30th Legislature updated on the sales process."
HOVENSA spokesman Alex Moorhead said he could not provide information on the status of the sale process. He said the company would continue to defer to the governor to make announcements.
"I'm afraid I'm not at liberty to speak on that," Moorhead said.
HOVENSA made public its decision to cease refining oil in January 2012 and announced it planned to operate its facility on St. Croix's South Shore as an oil storage terminal.
That decision led to negotiations between the company and the V.I. government, with an eye toward revising HOVENSA's existing concession agreement with the government.
After more than a year, those negotiations led to a proposed fourth amendment agreement that had HOVENSA agreeing to a sale process with an experienced investment banking firm and the government agreeing to allow HOVENSA to operate the refinery site as an oil storage terminal while the refinery is up for sale.
The 30th Legislature initially rejected the proposed agreement in August 2013, but it reversed that decision three months later, after the government and HOVENSA provided some clarifications senators had requested.
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