Page 4 - DMEA Week 33

DMEA COMMENTARY DMEA

SAMIR saga drags on as

Russian banks eye new refinery

Morocco’s sole refinery appears set to become a storage
facility as Russian financiers discuss building a replacement.

AFRICA DESPITE ceasing operations in August 2015, by the courts in order to secure a slice of the pro-
issues relating to the liquidation of Morocco’s ceeds from the sell-off.
sole refinery refuse to go away. A court ruling On July 31, 2018, the Casablanca Commer-
WHAT: in May granted permission to the state to utilise cial Court of Appeal ruled that the local Banque
The SAMIR case the refinery’s storage tanks in the clearest sign yet Centrale Populaire (BCP) – a major lender to
continues to drag on, and that Société Anonyme Marocaine de l’Industrie the company – had obtained valid guarantees
despite bids having been du Raffinage’s (SAMIR) refining days are over, against lending of 1.25bn Moroccan dirhams
made for the mothballed causing disbelief in the country, where the saga ($132mn) of debt, out of total borrowings from
facility, it looks likely to has played out like a Shakespearean comedy. the bank of around 2.9bn dirhams ($307mn).
be utilised for storage. The scrutiny over such proceedings is only BCP thereby secured a place as a senior cred-
likely to be emphasised by news that state-run itor, with privileged claims on liquidated assets.
WHY: Russian development bank VEB had entered A month earlier Glencore – another major cred-
Poor management has into a co-operation deal with African organi- itor – had a claim of 2.2bn dirhams ($233mn)
been cited as the reason sations to finance a new 100,000 barrel per day validated.
for the refinery’s failure, (bpd) refinery, which would effectively replace Meanwhile, on July 26, the court in Moham-
with legal cases played SAMIR. media ruled in favour of the state’s customs
out very publicly. Just how a state-owned asset of such impor- authority and convicted SAMIR of foreign
tance could have fallen quite so far from grace exchange violations – imposing a penalty of
WHAT NEXT: has been debated at great length, with much 18bn dirhams ($1.9bn).
Russian bank VEB is of the blame having been laid at the door of The trustees continued their efforts to find a
in talks to construct a Saudi-Ethiopian majority owner Mohamed buyer, but prospective investors were deterred by
new refinery that would al-Amoudi’s Sweden-based Corrall Petroleum onerous bidding conditions, in particular by the
presumably replace Holdings, which reneged on a promised capital need to provide local financial guarantees.
SAMIR, though optimism injection. Morocco has adapted smoothly to full
should be tempered. By the time SAMIR ceased operating, the dependence on fuel imports since the closure of
company had 867 employees and a debt burden Mohammedia but Rabat has been under strong
of around $4.6bn, much of which was owed to pressure from trade unions and other lobby
Moroccan customs. groups to ensure the resumption of operations
while it lacked the will or the funds to renation-
Derisory offers alise the plant.
Offers were tabled by various foreign companies
to acquire the assets over the past 18 months, Poor management
though none of these were successful. The assets Indeed, nationalisation was effectively ruled out
are also understood to include storage facilities in early 2018, when Energy, Mining and Sustain-
and interests in distribution and marketing. The able Development Minister Aziz Rabbah said:
refinery is located at Mohammedia, 40 km north “Either it finds a buyer or it will be permanently
of Casablanca. closed.” However, interest in state ownership has
Following offers from trading specialists since returned.
Glencore ($14.99mn) and Trafigura ($11.70mn), Amid strong pressure from employee rep-
the Moroccan subsidiary of UK-based Exol resentatives to ensure that refining operations
Lubricants was reported to have submitted an continue at the site, the head of the Moroccan
offer of $8.23mn in June 2019, undercutting all Competition Council (MCC), Driss Guerraoui,
earlier bids. Each of these were a far cry from the said early last year that “prior to its shutdown
administrator’s initial asset valuation of $2.5- in August 2015, SAMIR supplied the domestic
3bn, and did not go down well with the parties market with 64% of its refined product needs
involved in the liquidation process, with local […] the national refinery therefore played a fun-
media reports suggesting they had been viewed damental role in supply, but also in storage, as
as ‘too low’ and ‘below market standards’. it accounted for more than 50% of the country’s
Creditors owed part of SAMIR’s debt have storage capacity, which safeguarded our country
been queuing up to have their claims validated from any future shortages.”

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