Oil Refiner Vertex Energy Files Bankruptcy, Explores Sale

(Bloomberg) -- Publicly traded oil refiner Vertex Energy Inc. filed bankruptcy to implement a lender-backed plan to either sell its assets or restructure its balance sheet.

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Vertex Energy sought court protection late Tuesday in Texas, listing more than $772 million in assets and $642.8 million in debt on its Chapter 11 petition. The company’s shares have been declining for months and were trading at about 14 cents on Wednesday.

The company said it will explore a potential recapitalization of Vertex Energy’s balance sheet with the support of its lenders. But Vertex said in court papers that it first will first seek offers for its assets.

Vertex Energy and its lenders will field potential indications of interest from outside buyers until Oct. 29, according to court documents. Lenders backing the Chapter 11 may also credit bid on Vertex’s assets. A credit bid allows lenders to use debt they’re owed toward the purchase of a bankrupt company’s assets.

Vertex Energy has lined-up $280 million in Chapter 11 financing to fund the bankruptcy. The financing will provide Vertex with $80 million in new-money and roll-up some existing company debt. A roll-up moves existing company debt to the front of the repayment line in lockstep with newly lent money.

Houston-based Vertex Energy has multiple business segments. The company owns and operates an oil refinery outside of Mobile, Alabama and converted a section of the refinery last year to produce renewable diesel fuel, according to court documents. Vertex also supplies used motor oil to firms in the Gulf Coast region.

The company has filed a number of customary first day motions to continue covering its ordinary business expenses while operating in Chapter 11. Vertex Energy is scheduled to make its first bankruptcy court appearance later on Wednesday.

The case is Vertex Energy Inc., number 24-90507, in the US Bankruptcy Court for the Southern District of Texas.

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