PARIS (Dow Jones)
French Energy Minister Eric Besson Friday said banks had agreed with insolvent Swiss-based refiner Petroplus Holdings AG (PPHN.EB) to transfer cash and fuel to the company's refinery in France and its workers.
Petroplus's banks agreed to transfer EUR55 million in cash to Petroplus Marketing France, a French unit of the refiner which filed for insolvency in January, Besson said in a statement.
Petroplus, one of the largest independent European refiners, was forced to file for protection from creditors after running out of cash in late January after struggling for months with weak demand due to the economic slowdown in Europe and overcapacity amid tighter credit conditions, high crude prices and competition from Asia and the Middle East.
The company idled the refinery it owns in Petit-Couronne in northern France and the French government started to seek a buyer for the assets to resume operations and maintain the jobs. The refinery became a major political issue as presidential election campaign kicked in and opinion polls show rising unemployment is one of voters' main concerns.
President Nicolas Sarkozy, who is running for a second term, in February announced Royal Dutch Shell PLC (RDSA) had agreed to hire Petroplus refinery to process crude for six months.
The government will transfer EUR20 million to partly finance the resumption of refinery operations.
Additionally to the cash transfer, Petroplus's banks agreed to release half of the proceeds of the about EUR200 million worth of fuel that was in the refinery tanks when it was idled in late January.
About EUR17 million of that money will go to the refinery to help finance its opening and the remaining EUR83 million will go to a fund to help refinery workers, the statement said.
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