STOCKHOLM—Processing oil manufacturer Nynas A.B. was set to formally exit its more than yearlong reorganization on Jan. 18 after completing the final hurdle to exit the process.
The District Court of Sodertorn on Nov. 30 approved a "composition proposal" by creditors that was to become effective Dec. 21. But the Swedish Tax Agency appealed that ruling on Dec. 21, delaying the process.
Nynas, however, said on Dec. 28 that the liability to the tax authority has been repaid since, and the agency withdrew its objection. Because of the appeal, the formal public composition will become effective Jan. 18 as no other objections were filed, according to the Stockholm-based company.
"Nynas comes out of the reorganization as a stronger company with a five-year secured financing and a strong balance sheet," Bo Askvik, Nynas president and CEO, said in a statement. "Together with our loyal customers and suppliers, we will vigorously move forward and continue to develop our business in all our global markets. We are ready to take back lost market share and more."
Nynas filed for administration in the Sodertorn District Court in December 2019 as banks had withdrawn credit facilities and it was unable to pay due debts. The financial problems partially were linked to sanctions imposed by the U.S. Treasury Department's Office of Foreign Asset Control on Nynas' 50 percent shareholder PDVSA of Venezuela.
As part of the restructuring, the company reduced PDVSA's share ownership to 15 percent in May, which consequently led to the OFAC's lifting of sanctions on Nynas. "This has meant that the company has been able to contract crude oil deliveries and to continue financing discussions under more favorable terms," the oil refiner said.
In addition, Nynas said it had to switch from Venezuelan crude as a major feedstock due to U.S. sanctions. The company approved and processed "several new feedstocks," following a change program at its refineries and supply chain.
"Nynas can now run our refineries with 100 percent non-Venezuelan feedstock without affecting the strict demands of our consistent product quality," it said.
With the new feedstock portfolio and the production upgrades, Nynas said it is able to increase and optimize utilization at its refineries and increase volumes. Furthermore, the Stockholm company said it had secured "good liquidity and cash flow" during the reorganization, due to a reduction in overdue customer payments, a granted deferral of tax payments and an agreement on inventory financing.
Moving forward stronger
Nynas said it is coming out of the reorganization as a stronger company financially, a situation that will benefit both its customers and suppliers.