Oil refinery owner Essar completes $150m financing deal

Essar Oil UK (EOUK), which owns the Stanlow oil refinery in Cheshire, has completed a $150m financing deal.

The group’s receivables portfolio is with Hamburg Commercial Bank AG and Mizrahi Tefahot Bank. This new facility will be used for working capital and general corporate purposes.

Essar said the successful closure of this financing highlights the banking community’s confidence in EOUK, building on its financial performance and market position in the UK.

It also enables EOUK to strengthen major customer relationships and increase sales volumes through the ability to offer its customers greater financing flexibility.

This financing comes at a competitive market rate for a facility of this size and nature, thereby enabling EOUK to optimise its longer term financing strategy.

Deepak Maheswari, Essar Oil UK chief executive, said: “This is a positive step forward.

“EOUK is building for the future, with ambitions to become the UK’s first low carbon refinery. Serving our customers’ needs and securing competitive financing is critical to this overall objective.”

Satish Vasooja, chief financial officer at Essar Oil UK, said: “We are pleased to complete this important financing and build any relationship with UMTB and HCOB Banks.

“This financing helps us deliver a part of our capital structure on market standard terms.

“It is a sign of the confidence the banking community has in EOUK and our long term financial performance, while it will also support our strategy to provide better terms to customers and to increase overall sales volume.”

Just over a year ago Essar announced it had settled a payment dispute with HMRC.

In April 2021 Essar entered into a ‘time-to-pay’ arrangement with HMRC for a total of £770m in VAT. In September it was granted a short extension to the original schedule, which had a January 2022 deadline.

And in July last year, announcing a trading update for the first quarter period ending June 30, it revealed that it had paid all historic COVID-related deferred tax payments in full.