Oil Processor Vertex Energy Declares Bankruptcy and Initiates Sale Process

Vertex Energy Inc., an oil refiner with over $772 million in assets and $643 million in debt, has filed for Chapter 11 bankruptcy in Texas. The company aims to explore a sale or restructure of its balance sheet, having received support from its lenders. Vertex is seeking interest from potential buyers and has secured $280 million in financing, including a credit bid by its lenders. The bankruptcy includes a plan to convert a section of its Mobile, Alabama refinery to produce renewable diesel fuel.

Vertex Energy Inc., an established specialty refiner with a market capitalization of over $772 million and a significant debt burden of $643 million, has recently filed for Chapter 11 bankruptcy in Texas [1]. This move comes after the company received backing from its lenders, who aim to explore potential solutions to restructure Vertex's balance sheet.

The bankruptcy filing, initiated in coordination with a Restructuring Support Agreement (RSA) signed by 100% of the company's term loan lenders, marks the beginning of a formal restructuring process [1]. Vertex's management team, led by President and CEO Benjamin P. Cowart, expressed gratitude for the continued support of its lenders and reiterated their commitment to maintaining operations and prioritizing safety and customer satisfaction.

The RSA outlines a plan to provide Vertex with $80 million in new debtor-in-possession (DIP) financing to support its day-to-day business operations during the restructuring process [1]. This financing is essential, as it enables Vertex to continue operating while exploring various restructuring strategies, including a potential sale transaction.

Amidst these financial challenges, Vertex is also focusing on sustainable growth initiatives. The company is planning to convert a section of its Mobile, Alabama, refinery to produce renewable diesel fuel [1]. This strategic move aligns with the growing demand for sustainable energy sources and could potentially enhance Vertex's long-term value.

While the specifics of the restructuring plan have yet to be determined, Vertex's management team remains optimistic about the company's future prospects. With the support of its lenders and a renewed focus on sustainable growth, Vertex is poised to emerge from this challenging period stronger and more resilient.

[1] + https://www.businesswire.com/news/home/20240923854192/en/Vertex-Energy-and-Its-Lenders-Initiate-Formal-Pathway-Aimed-at-Achieving-Sustainable-Capital-Structure