Essar Oil UK, operator of the Stanlow refinery in northwest England, on Friday said it has tied up USD 850 million in a new financing deal to fully replace a credit facility that had recently had its terms altered by a bank.
The operator of the 204,000 barrels per day Stanlow refinery in recent weeks faced "short term financial disruption" from the changed terms of the now-replaced credit facility.
In a statement, the firm said "it has closed new financial arrangements of over USD 850 million. This has allowed Essar Oil UK to replace its former credit facility as well as access additional capital, thereby strengthening its financial position".
The funding is made up of liquidity from a diversified range of sources, including bilateral arrangements with many of its key customers on enhanced payment terms and other long-term financings, linked primarily to crude supply, it said without giving details.
At least some of the firm's credit-linked crude purchase arrangements have shifted in recent months. Also, Essar Oil UK's (EOUK) chief executive Stein Ivar Bye departed in March after only five months in the job.
"With these financial arrangements now in place, EOUK has more low-cost liquidity to meet its upcoming requirements, and can continue to focus its energies on its transition to become a 'low carbon energy provider' of the future," the statement said.
The company is already working on delivering two blue hydrogen production hubs at Stanlow, which will attract 750 million pounds in total investment. Follow-on capacity growth is planned to work towards the Government's new target of 5GW of low carbon hydrogen for power, transport, industry and homes. Stanlow is committed to reaching 80 per cent of the government-set targets, it said.
In addition, it remains committed to delivering the necessary operational cost reductions at the refinery over the course of the coming year in order to help secure its long-term future and to ensure it remains competitive in its traditional refining business.
EOUK has also recently completed a review and update of its corporate governance and its Board has adopted the recommendations arising out of that review process, which included independent input from Ashurst LLP.
"As a result of that process, the board has committed to appointing two independent non-executive directors to the board," the statement said.
Commenting on the recent developments, Chairman Prashant Ruia said: "Securing this financing demonstrates the confidence all our stakeholders have in our long-term vision for Stanlow." "We believe this confidence will be further bolstered by the updates we have made to our corporate governance, which includes a commitment to appoint two new independent non-executive directors to our board. These appointments will further enhance our overall governance and risk assessment processes, as well as providing insights and strategic inputs to the business as it continues its transition to low carbon operations."