Essar Oil secures additional funding putting it in ‘stronger financial position’
Essar Oil (UK), which owns and operates the Stanlow Refinery on the banks of the River Mersey, has secured additional funding to strengthen its financial position.
The group had been struggling this year after a funding shortfall following falls in fuel prices caused by the pandemic during lockdown.
In May, it secured financial arrangements of more than $850m with funding made up of liquidity from a diversified range of sources and now EOUK can confirm additional funding has been secured, bringing total funding availability to $1.1bn.
EOUK said it now needs to raise the last tranche of financings of $300m, which forms part of its original financing plan.
Discussions are on-going with all key stakeholders and the company expects to close these financings by the end of the year.
EOUK also entered into a time-to-pay arrangement with HMRC for a total of £770m in April.
It has already repaid HMRC £547m leaving a balance of £223m, as part of the Government opt-in scheme.
All companies under the TTP have been given until January 2022 to meet their commitments.
EOUK had agreed to an accelerated schedule to make this payment and is in discussions with HMRC to modify that schedule.
It said it fully expects to meet all payments by the January deadline.
Prashant Ruia, Chairman of EOUK, said: “The pandemic has led to extremely challenging time for the refining industry in the UK in particular, as a collapse in demand for our end products placed considerable financial and management strain on the business.
“The overall environment remains difficult, but given the considerable steps we have taken, we are now in a stronger financial position, and importantly, we are seeing improved levels of demand as the market recovers.
“We remain cautious about the medium-term outlook for the business. I am pleased with the progress we have made on our VAT repayments and would like to thank HMRC for their continued engagement.”
