Swiss-based Petroplus Holdings AG's (PPHN.EB) eleventh hour finance deal allows the European refiner to restructure its loss-making business while it negotiates a possible crude supply partnership, but it could just end up being a stay of execution, analysts said Thursday.

"The temporary agreement doesn't mean lenders have found some new belief in Petroplus--they are in the middle of discussions," said Deutsche Bank analyst Gergely Varkonyi.

Late Wednesday, the loss-making company said its lenders had agreed to provide it with temporary financing required to operate two of its five refineries and "meet critical expenses." Only last Friday the refiner said it had lost access to all its credit lines, forcing it to shut down three refineries.

The temporary agreement just provides enough liquidity to assure there will be no damage to the company's assets at the mothballed refineries and to guarantee two other refineries carry on running at reduced rates, Varkonyi said.

One of the options for Petroplus to survive would be to downsize, analysts said.

"Potentially, Petroplus could be just two refineries," said analyst Martin Schrieber at Zuercher Kantonalbank.

The company could also decide to keep the idled refineries, rather than sell or close them, hoping for a recovery in profit margins, analysts said.

At 1156 GMT Petroplus shares were up 28% at CHF1.53. The company employs 2,500 people and has five facilities across Europe .

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