Hundreds of around the Lincolnshire and Humberside area could be at risk as it was announced that Prax Group has entered into insolvency proceedings.
State Oil, Prax’s parent company, have called in administrators across the group, causing employees and stakeholders to worry about the future of the company.
Reports suggest that Prax Lindsey has been somewhat of a headache for owners, State Oil since they acquired the business from Total back in 2021. The site is said to have become an increasing drain on resources for the wider Prax Group over the last few years.
It’s understood that the oilfields and petrol stations they own are not part of the administration, and could be bought out by another investor.
It’s a huge blow for the country, as the company is responsible for almost a tenth of the nation’s oil. Lindsey Oil Refinery is currently the only leading refinery left in the UK to have British owners, the other four all owned by US or Indian businesses.
It’s only four years ago that Prax Lindsey concerned government officials by announcing a £228m loss in the 20/21 financial year. State Oil’s takeover quelled the flames initially, but now seems to find themselves in a similar position.
What do workers need to do next?
440 workers are employed on the refinery, as well as many more sub-contractors.
Gov.uk have issued advice to sub-contractors that are owed money from the company. Anyone in such a position should register as a creditor and complete a Proof of Debt form which can be found on the Gov.uk site.
For employed staff, they’ll face an anxious wait as they find out whether the group is bought out or wound up. Should the latter occur, they will be listed as a preferential creditor, and given some priority in being paid what they are owed. Should Prax be unable to do so, there are other routes to take, such as the Redundancy Payments Service, which uses National Insurance Payments to ensure that staff who fall victim to their employer’s insolvency aren’t left out of pocket.
Prax’s appointed administrator, Clare Boardman said that every available option will be looked at, and wouldn’t rule out a sale of Prax’s retail operations currently outside of insolvency in the UK and Europe.
Will Lindsey Oil Refinery’s troubles affect your company?
When big energy companies hit difficulties, it can have a knock-on effect for many other SMEs
Forbes Burton provides free initial consultations for owners of limited companies. We can take a look at your business to create restructuring plans, or even help you with the easiest closure or sale solutions.
Call one of our friendly advisers on 0800 975 0380 or email advice@forbesburton.com to find out if a CVA would be suitable for your situation.