O.W. Bunker gets court support on bid procedures for stored oil sale

By Kali Hays

New York, Nov. 24 – O.W. Bunker Holding North America Inc. obtained approval of the bid procedures for the sale of company oil stored at Vopak Terminal Los Angeles, Inc. in Wilmington, Calif., according to a Monday order from the U.S. Bankruptcy Court for the District of Connecticut.

As previously reported, the company said more than 27,000 metric tons of various grades of oil is being stored at the Vopak terminal, and smaller quantities are on a vessel or vessels in the Los Angeles area.

O.W. Bunker has received indications of interest in the range of $350 to $500 per metric ton, depending on the type of oil.

Under the approved procedures, all qualified bids are due by 1 p.m. on Dec. 2 and an auction is scheduled for Dec. 4.

A hearing to approve the winning bid is set for Dec. 5.

Minimum bids must result in a value greater than the larger of either the minimum per-metric ton price for each product or the sum of the price offered by a stalking horse bidder, plus the $5,000 maximum expense reimbursement to be paid if a stalking horse bidder is not ultimately the high bidder, plus $100,000.

Monthly charges to store the Vopak oil exceed $300,000, according to the bid procedures motion.

In addition, the company said it has no hedges or other protection for price volatility, which could cost it hundreds of thousands or millions of dollars.

The company said its parent entities have ceased funding, in an alleged breach of their obligations, making a sale by the first few days of December critical.

OW Bunker is an independent distributor and reseller of marine fuel and is based in Denmark. Its U.S. subsidiaries filed bankruptcy on Nov. 13 under Chapter 11 case number 14-51720.

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