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Limetree Bay Closes $1.25 Billion Loan, Says Refinery Could Restart by End of 2019

Limetree Oil Refinery (File photo)
Limetree Oil Refinery (File photo)

Limetree Bay Ventures, announced Nov. 30 that it had closed on $1.25 billion financing to restart its St. Croix refinery, which the company said could happen by “the end of next year.”

There was no report on the $70 million Limetree Bay committed to release to the V.I. government upon closing of all the necessary agreements to restart the refinery, but company officials are speaking of the restart as a done deal.

“The closing of the financing provides the resources necessary to complete the refinery restart,” said Brian Lever, president of Limetree Bay Refining, in a statement issued by the company. “We have 1,300 workers currently involved in the project and expect a significant ramp in activity over the coming months as we prepare for restart by the end of next year. We are very grateful to the broad team that has made this possible.”

According to the company, the financing includes $550 million of preferred equity and a $700 million term loan. The preferred equity reportedly was led by funds and accounts managed by EIG Global Energy Partners, which was joined by other investors including funds affiliated with BlackRock and Barclays, The term loan was led by Westbourne Capital. ArcLight reportedly also made a significant additional common equity commitment to Limetree Bay.

Barclays acted as lead placement agent and EIG Global Energy Partners Capital Markets, LLC served as co-placement agent on the preferred equity issuance by Limetree Bay. Goldman Sachs Bank USA and Barclays acted as joint lead arrangers and joint bookrunners on the term loan issuance by Limetree Bay Refining.

The government’s agreement with Limetree Bay calls for an immediate payment of $70 million; $40 million as a short-term loan and $30 million as payment for a land purchase.

“Upon the closing of the transaction, ArcLight Capital will make a $70 million closing payment to the Government of the Virgin Islands,” Government House announced in July, when unveiling a proposed new agreement with Limetree Bay and plans to potentially partially restart the refinery.

At a July 18 hearing on the deal, Finance Commissioner Valdamier Collens said the deal involved “an up front payment of $70 million.”

In August, Collens told the V.I. Legislature the “money was always contingent on ArcLight securing the deal with an operator which they have not done yet. When that happens then it will be immediate.”

Although it was not discussed at the July hearing before the Legislature approved the agreement, a close reading finds two brief mentions of a “refinery transfer agreement” which has to be signed before the deal is considered “closed.”

In the agreement’s introduction, there is a clause saying “… in order to facilitate a Refinery Restart, Terminal Operator will enter into on or around the date hereof a transfer and assignment agreement (the “Refinery Transfer Agreement”) with Refinery Operator, which is an indirect subsidiary of Limetree Bay Ventures … .” And buried in the terms for when the deal “closes” it says “the transactions contemplated by the Refinery Transfer Agreement shall have been consummated.”

“They are waiting to finish up the negotiations with the actual franchisee that is going to be running the operations,” Budget Director Julio Rhymer said at the same hearing.

Limetree Bay issued a release on business press release website PRNewsire but, in a change from past practice, did not send the Source a press release. Its past releases tell recipients to contact Limetree Bay at questions@lbterminals.com for more information. In November and again on Monday, the Source sent the following questions to that email address:

– Has Limetree Bay released the $70 million, reflecting that a contract is in place to restart and run the refinery?
– If not, why not?
– If so, why has this not been publicized?
– Will anyone representing Limetree Bay go on record by name saying there is a 100 percent certainty you will restart the refinery?

Limetree Bay had not responded to the Source’s requests for information.

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4 COMMENTS

    • You prefer money over health? You are an American. Also, America’s health industry has already proven they are more into addicting you than treating you, as capitalism needs addicts in order to thrive. Babylon needs hosts, and they have plenty of you that will do whatever Babylon wants and will spread the nonsense far and wide. This beautiful island has more real medicine that works on it than any medical care professional will ever give you and without all the side effects and addiction. I guess you prefer a long life of suffering over a shorter, but healthier life. Lord, have mercy, are people desperate to make a buck. When they will trade their health and the health of their children and all things for money, you know they are sound asleep!

  1. Intentional poisoning? Hyperbole at best.
    What we will have is a boost in the economy, more workers with health insurance, which will make their children healthier. All while allowing St. Thomas to have more money in the coffers.
    Thank you Kenneth Mapp. You will go down in history as the best governor ever.