As West Indies Petroleum prepares to close on the Limetree Bay Refining, LLC asset, which has a deadline of January 21, 2022, new concerns about WIPL's financial health have surfaced courtesy financial documents reviewed by the Consortium.
It remains to be seen whether WIPL has the wherewithal to finance operations and to effectively maintain the asset for a restart while it goes through the Environmental Protection Agency's 12-18 months Prevention of Significant Deterioration (PSD) permitting process as stipulated in the letter to the bankruptcy court submitted by the EPA.
Limetree Bay's investment banker stated during the Dec. 6 auction sale hearing that WIPL was in sound financial condition. And Governor Albert Bryan on Dec. 13 told the Consortium he had met with principles of the company on Sunday, Dec. 12. "It was a meet and greet," Mr. Bryan said on Dec. 13 of the meeting. "They intend to open the refinery. Whomever wins will be aided in their effort to get a permit. The government has already begun the work in paving a road to a safe restart with the EPA."
He added, "They seem financially credible and adequately experienced to make a bid. The courts will decide."
However, after reviewing the audited financial documents, a few things were clear.
First, the company has significantly more debt than assets. WIPL also has much more debt than equity and its debt-to-equity ratio is in an extremely risky category. The company's profit margins are very low and therefore it is not making much profit as a percentage of its revenue. Indeed, WIPL lost approximately $161,000 last year. WIPL also has a very low return on assets meaning its income is very low relative to its assets. Debt-to-asset ratio is also in a very poor category. The documents also show that the company defaulted on all of its loans and breaches of covenants for loans causing it to be payable on demand.