Auditors have warned concerning the monetary well being of the corporate behind the Stanlow oil refinery, regardless of its efforts to refinance loans and settle a debt to HM Income & Customs.
Paperwork filed at Firms Home present that losses at Essar Oil (UK) deepened from $221m (£168m) to $321m in 2021, a yr through which authorities officers grew to become involved concerning the monetary place of the corporate, which provides 16% of UK street gasoline from its refinery in Ellesmere Port, Cheshire.
The group reported progress in refinancing its money owed, changing a mortgage from Lloyds Financial institution with $325m of latest lending.
Essar’s subsidiary, Stanlow Terminals Ltd, is engaged on a deal to lift as much as $300m of debt and the group stated it may additionally faucet different sources of medium-term lending.
Essar Oil has additionally diminished the quantity it owed to HMRC, after it took half in a scheme that enable corporations hit by Covid-19 to defer VAT repayments.
At one stage in March 2021, Essar owed £771m to HMRC but it surely stated this had since been diminished £109m and was as a result of be settled utterly this month.
However an auditor’s report warned of uncertainty over the corporate’s discussions about new loans to assist it climate the impression of Covid-19, which considerably diminished demand for gasoline earlier than a latest revival in situations.
The report stated that whereas financing proposals have been beneath dialogue, to mitigate the danger of the corporate defaulting on funds, the talks had not concluded.
This, the auditor stated, “may cast significant doubt on the company’s ability to continue as a going concern”.
The accounts have been signed off earlier than the invasion of Ukraine and don’t make any reference to the potential impression of the warfare on the corporate or its ties to Russia.
Essar, which is in the end owned by the Indian billionaire Ruia brothers, has beforehand distanced itself from its father or mother firm’s lending association with the Russian financial institution VTB.
Earlier this yr, dockers refused to unload Russian oil shipments destined for the refinery. Stanlow later stated it was searching for different provides.
The corporate’s accounts do confer with its contract with Litasco, a Switzerland-based commodity buying and selling firm in the end owned by the Kremlin-linked oil agency Lukoil.
Because the Guardian reported earlier this yr, Litasco has a declare on Stanlow that kicks in if Essar defaults on funds beneath an oil sale and buy settlement. Essar has stated that Litasco has no capability to affect operations on the terminal.