A company planning a $4.6bn (€2.9bn) oil refinery in Canada, in which Dermot Desmond is a major investor, has managed to obtain bankruptcy protection from its creditors as it goes about raising fresh cash to get the project off the ground.
Newfoundland and Labrador Refining Corporation, in which the Irish billionaire is understood to own a 21pc stake, was served notice last week by SNC Lavalin, a contractor providing environmental and engineering services, that it was looking to have NLRC declared bankrupt and an interim receiver appointed to the firm.
However, the Supreme Court of Newfoundland and Labrador granted NLRC bankruptcy protection. The company said the so-called "stay of proceedings" order would allow it to come up with a proposal for restructuring and to continue to try and attract new financing.
The consortium behind the proposed 300,000-barrels-a-day refinery also includes Canadian energy and mining firm Altius, with a 37.5pc stake, Scottish mining multi-millionaire Harry Dobson and British venture capitalist Stephen Posford.
NLRC warned in March that the turmoil in the global debt markets could slow the pace of the development of the first oil refinery to be built in North America in over two decades.
Company managing director Brian Dalton said he was "very pleased" that the "obstacle" of SNC Lavalin's bankruptcy petition had been removed. "NLRC can now resume its focus on the marketing of this valuable project to potential partners and financiers."
NLRC said it was working with its advisers on restructuring options, which may lead to the sale of assets, financing or inclusion of partners in project construction. The company is in talks with potential investors in the Middle East and India.
- Joe Brennan