Hilco Redevelopment Partners to pay $240 million for Philadelphia Energy Solutions
- Dan Primack, author ofAxios Pro Rata
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