Owner of Big West refinery confirms Alon as sole bidder
| Wednesday, Mar 17 2010 06:04 PM
Last Updated Thursday, Mar 18 2010 10:50 AM
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The Big West refinery
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Flying J Inc. confirmed Wednesday that only one bidder -- the Dallas-based subsidiary of Alon Israel Oil Co. Ltd. -- has made an eligible offer to buy Big West, the refinery it owns on Rosedale Highway.
The fact that no other investors turned in a qualified offer by Tuesday's bidding deadline appears to clear the way for Alon to pay $40 million to purchase the refinery in bankruptcy court next week.
"The next step will be the hearing to approve the sale on March 23, 2010," Flying J spokeswoman Virginia Parker wrote in an e-mail Wednesday. She added that Alon would take possession of Big West no later than June 1 under an agreement announced last month that established Alon as the lead bidder.
Alon declined to comment.
The plant's auction had been set for today, and the winner was to be announced Tuesday.
Because of Flying J's Chapter 11 bankruptcy filing Dec. 22, 2008, Big West has not been fully operational for more than a year. At full capacity it can refine up to about 70,000 barrels of oil a day, producing 2 percent of the state's gasoline and 6 percent of its diesel. Some 175 workers were let go when it was shut down.
More than 100 groups expressed interest when the refinery was put up for sale last year, though that list was later narrowed to about 30, refinery union official Ed Huhn said.
Industry observers had speculated that the refinery would draw little market interest because of tight margins in the refining industry, combined with the fact that Big West was scheduled to undergo an upgrade costing at least $600 million in order to become more dependably profitable.
Plant workers have voiced support for Alon's bid, noting that the company owns and operates four other U.S. refineries, including a complex in Los Angeles County.
Alon said Feb. 1 that it intends to connect the refinery by pipeline to its operation in L.A. County, though the company has been circumspect about how much time and money that would take, and whether the company would restart refining at Big West in the meantime.
