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Prax Group files for insolvency in the UK after losses at Lindsey refinery

British company Prax Group has filed for insolvency, putting hundreds of jobs at its Lindsey oil site at risk, according to Sky News.

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The British energy group Prax Group has filed for insolvency, a direct consequence of persistent losses recorded at its Lindsey refinery. This judicial procedure, reported by Sky News and relayed by Reuters on 30 June, places significant employment risks on this industrial site, one of the last in the UK oil sector.

Crisis management and appointment of administrators

Prax Group’s parent company, State Oil Ltd, was compelled to appoint administrators. According to industry sources cited by Sky News, the UK court officer mandated FTI Consulting to serve as special manager for the Lindsey site. At the same time, Teneo was designated as administrator for the group’s other entities. Prax Group, FTI Consulting and Teneo did not immediately respond to Reuters requests for comment.

This announcement comes as Prax Group had, in recent years, strengthened its position in the refining sector. The company is owned by its founders, Chief Executive Officer Sanjeev Kumar Soosaipillai and executive board member Arani Kumar Soosaipillai, along with their respective family trusts.

Impact on the group’s assets

Prax Group manages and holds various assets in the oil and energy industry. At the end of 2023, the company had reached an agreement to acquire Shell’s 37.5% stake in the PCK Schwedt refinery, located in Germany. This development had been regarded as a strategic strengthening of its refining and distribution activities.

The insolvency procedure now places the future of the Lindsey refinery under judicial control and could weaken the group’s entire operations in several European markets. The effects of this decision are being closely watched by sector stakeholders, due to the size of the workforce at risk and the significance of the assets held.

Uncertainty remains regarding the next steps of the procedure, as no comment has been provided at this stage by the main parties involved, while creditors and partners closely monitor the evolution of the case. According to Sky News, the appointment of administrators aims to organise business continuity while evaluating possible options for job retention and asset preservation.

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