Jan 23, 2020 - Energy & Climate

Hilco Redevelopment Partners to pay $240 million for Philadelphia Energy Solutions

Dan Primack

Philadelphia Energy Solutions fuel tank — Photo: Getty Images

Hilco Redevelopment Partners will pay $240 million to buy Philadelphia Energy Solutions, a 5,000 acre oil refinery property in South Philadelphia, per bankruptcy court documents.

Why it matters: PES was the East Coast's oldest and largest oil refinery, before being partially destroyed by a fire and explosions last year. There had been hopes that this sale process would find a buyer interested in rebuilding and restarting the plant, which had employed around 1,000 people, but Hilco says it has no plans to do so.

This is the property you often see when flying into Philadelphia's airport.

The bottom line: PES once was an acclamatory story for The Carlyle Group, which in 2012 struck a deal with Sunoco to kept oil flowing and people employed (including hundreds of union steelworkers).

But a conflicted real estate arrangement with a Carlyle-backed rail terminal contributed to a 2018 bankruptcy, as did new renewable energy regulations, from which a bruised PES emerged before last summer's disaster led by yet another Chapter 11.

Update: Some PES creditors oppose the Hilco deal, per Reuters.

Go deeper: Climate change expected to drive private equity away from fossil fuels

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Hilco Redevelopment Partners to pay $240 million for Philadelphia Energy Solutions

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