* Conversion could free up $200 million * Capex savings to be partly offset by shutdown costs
ZURICH, April 1 (Reuters) - Independent oil refiner Petroplus said it will convert a troubled refinery into a terminal after failing to sell it, a move that could swell the company's working capital by up to $200 million.
The company said it expects to stop processing crude oil at its Reichstett, France refinery in April, and will sell off inventories to meet existing orders or on the spot market. It will then look to sell the terminal after shutdown, it said.
"We have worked hard to find another solution for the site but were unfortunately unable to find a feasible alternative," said Petroplus Chief Executive Jean-Paul Vettier.
The company said it had set up a job protection plan to soften the effects on plant employees.
Analysts said confirmation of the Reichstett conversion would free up capital and could boost the share price.
"The conversion of the refinery will allow the company to reduce inventory, receivables payables, freeing up as much as $200 million in working capital, " said Deutsche Bank analyst Gergely Varkonyi.
"Capital expenditure could decrease by around $30 million, though the working capital and capex savings could be partly offset by one-off shutdown costs, including the undisclosed cost of the job protection plan," he said.
Petroplus has been looking to sell or shutter the refinery since last year. Reichstett is its least profitable plant and has been beset by a series of strikes. (Reporting by Martin de Sa'Pinto)