Above: US Virgin Islands Governor John de Jongh (right)
By the Caribbean Journal staff
The board of directors of the Virgin Islands Public Finance Authority has approved funding for the territory’s government to hire a private financial firm to provide analysis and guidance as it works to negotiate the closure of the HOVENSA oil refinery in St Croix.
Duff & Phelps will work with Governor John de Jongh to determine the government’s next steps with respect to the facility, which shuttered earlier this year.
The closure of the refinery has been “devastating” by de Jongh. The USVI has received almost $8 million in emergency funding from the US Department of Labour due to HOVENSA’s closure.
Duff and Phelps “will play a crucial role in advising my team as we navigate the closure of the territory’s largest private employer and tax payer, evaluate the merits of their proposal for the future use of the refinery site and explore options that may be in the best interests of the people of the Virgin Islands,” de Jongh said.
The closure of the refinery resulted in an estimated loss of $100 million in government revenues.
Duff & Phelps will look at possible scenarios for the future of the HOVENSA site, including the potential of a Chapter 11 bankruptcy filing, and help in talks with HOVENSA’s management.
“The size of the HOVENSA refinery and the impact of its closure on the territory made it absolutely necessary for the government to have as part of its team an industry expert that will provide guidance and analysis as we move forward with regard to the south shore refinery on St Croix,” de Jongh said.
The Public Finance Authority approved $500,000 to fund the government’s contract with the firm.
Duff & Phelps is based in New York.