Hess Bid. I Don't Understand. Explanation Pls  

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ms411
(@ms411)
Expert

If the judge hasn't determined winning bidder, how can Mapp go forward?

If Operating Agreement has to be approved by legislature how does that affect a winning bidder if winning bidder can't get Operating Agreement approved?

So government does not have a refinery to sell, but it does have an approved Operating Agreement to sell?

Do any other entities in the world have Operating Agreements? Seems like such an agreement is inflexible in today's fast moving, competitive environment.

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Posted : November 26, 2015 11:59 am
OldTart
(@OldTart)
Expert

A bunch of fluff and BS. Mapp promises that in a week the GERS financial issues will be resolved without their board's plan being implemented but the legal contest to the bidding process isn't to be held until December 17th.

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Posted : November 26, 2015 12:23 pm
watruw8ing4
(@watruw8ing4)
Trusted Member

Glad someone asked. It doesn't make sense to me either.

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Posted : November 26, 2015 3:23 pm
Beeski
(@Beeski)
Trusted Member

Logic tells me that the Governor and his staff have analyzed all 3 bids, to determine which company offered the most potential to the VI economy, and the GVI coffers.
They took it a step further and negotiated a tentative operating agreement for the terminal storage and hopefully refining operations.

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Posted : November 26, 2015 6:11 pm
Alana33
(@Alana33)
Expert

"Putting the cart before the horse."

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Posted : November 26, 2015 7:22 pm
CruzanIron
(@CruzanIron)
Trusted Member

Logic tells me that the Governor and his staff have analyzed all 3 bids, to determine which company offered the most potential to the VI economy, and the GVI coffers.
They took it a step further and negotiated a tentative operating agreement for the terminal storage and hopefully refining operations.

Bingo!

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Posted : November 26, 2015 8:28 pm
ms411
(@ms411)
Expert

I don't understand how the VI government can determine which bid to accept. Isn't that why there's an auction and a judge? The VI government is just one of many creditors from what I understand.

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Posted : November 26, 2015 9:06 pm
janeinstx
(@janeinstx)
Trusted Member

(tu)

Logic tells me that the Governor and his staff have analyzed all 3 bids, to determine which company offered the most potential to the VI economy, and the GVI coffers.
They took it a step further and negotiated a tentative operating agreement for the terminal storage and hopefully refining operations.

Bingo!

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Posted : November 26, 2015 9:55 pm
janeinstx
(@janeinstx)
Trusted Member

Theoretically they can't. However they can look at the bids and talk to the bidders to see who offers the best return for the vi govt. Who ever buys is going to have to secure an operating agreement and it would behoove Hovensa to decide that the company most likely to secure that agreement is the top bidder. After all HOVIC/PDVSA wants to rid themselves of Hovensa so declaring someone who is unlikely to get that agreement THE WINNER WILL NOT GET THEM WHERE THEY WANT TO BE. both bids are contingent on the buyer being able to get that agreement thru the legislature. Additional by virtue of their(GOVT) lien they own about a 1/3 of the refinery hence Monarchs bid that only, in real dollars, purchased that lien and only offered pie in the sky promises based on future earnings. Before tax? After tax? Makes a big difference.

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Posted : November 26, 2015 10:04 pm
ms411
(@ms411)
Expert

Thanks, Jane, that helps a lot, but did the VI govt even look at other agreements? Isn't that what Monarch and the other complaining about and why the judge smells collusion? Is the operating agreement required for govt concessions? It seems to me like Mapp is acting like he owns Hovensa.

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Posted : November 26, 2015 10:42 pm
janeinstx
(@janeinstx)
Trusted Member

Operating agreement = concessions
Monarch did not make the threshold set to be a real bidder
The only ones who did are Arc Light and Buckeye. I don't know what was presented to the govt in the way of concessions requested/ granted, etc. what I do know is that although on the surface buckeye looks like the better bid they have never carved that dollar amt up so we don't really know who will get what. Arc Light has line items to identify where every dollar will go. Who gets what. So it may very well be that the Govt will get a higher payout with the smaller bid.

Monarch is just pissed off that they couldn't do an end run around the whole process and get the govt to turn over the lien to them.

The unsecured creditors want to make sure that there will be enough money left over for them and are just covering their asses.

The VI Govt by virtue of that lien and as representative of the govt Mapp does sort of own HOV. I've see documents that consider that lien to be as worth much as a 3rd share of the property. While we have no official standing to approve or disapprove who the top bidder is, it will not be someone who the govt has decided is not paying enough into our coffers or is asking for concessions far beyond what the governor believes the legislature will ratify.

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Posted : November 26, 2015 11:06 pm
ms411
(@ms411)
Expert

Thank you, Jane. It will be interesting to see what's reported after Dec 17.

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Posted : November 26, 2015 11:21 pm
janeinstx
(@janeinstx)
Trusted Member

The date has been changed to Nov 30

Thank you, Jane. It will be interesting to see what's reported after Dec 17.

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Posted : November 26, 2015 11:53 pm
Exit Zero
(@exit-zero)
Trusted Member

Buckeye is a serious and real contender - IMHO - which means little to the deal. I think they offer a real chance for the STX facility to become world class.

Buckeye Partners, L.P. (NYSE: BPL) is a publicly traded master limited partnership and owns and operates a diversified network of integrated assets providing midstream logistic solutions, primarily consisting of the transportation, storage, and marketing of liquid petroleum products. Buckeye is one of the largest independent liquid petroleum products pipeline operators in the United States in terms of volumes delivered with approximately 6,000 miles of pipeline and more than 120 liquid petroleum products terminals with aggregate storage capacity of over 110 million barrels across our portfolio of pipelines, inland terminals and an integrated network of marine terminals located primarily in the East Coast and Gulf Coast regions of the United States and in the Caribbean. Buckeye has a controlling interest in a company with a vertically integrated system of marine midstream assets in Corpus Christi and the Eagle Ford play in Texas. Buckeye’s flagship marine terminal, BORCO, is in The Bahamas and is one of the largest marine crude oil and refined petroleum products storage facilities in the world and provides an array of logistics and blending services for the global flow of petroleum products. Buckeye’s network of marine terminals enables it to facilitate global flows of crude oil, refined petroleum products, and other commodities, and to offer its customers connectivity to some of the world’s most important bulk storage and blending hubs. Buckeye is also a wholesale distributor of refined petroleum products in areas served by its pipelines and terminals. Finally, Buckeye also operates or maintains third-party pipelines under agreements with major oil and gas, petrochemical and chemical companies, and performs certain engineering and construction management services for third parties.

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Posted : November 27, 2015 2:16 am
janeinstx
(@janeinstx)
Trusted Member

Buckeye and Arc Light already have a large presence here in the Caribbean with Buckeye being the leader. The purchase of HOV by Arc Light would flip that and put Arc Light at the lead. Buckeye owns the St Lucia terminal which is virtually empty (I'm told) and the only full time employees are the security guards. The concern being that Buckeye has no intention of doing anything with the facility, they just want to keep it out of Arc Lights hands.

Originally it was just the terminal/ tanks involved in the bidding but it now includes all above ground refinery assets. Sounds good until you realize that neither bidder has said they have any intention of refining and have both implied they will just tear it down.

Monday is the 30th. Should be interesting to see what news comes out. No matter what the legislature needs to wrap their heads around the idea that Chapter 7 is looming on the horizon if an agreement can't be reached with whom ever the buyer is.

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Posted : November 27, 2015 8:09 am
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