Essar Oil UK gets new long term working capital funding

Essar Oil UK, which owns and operates the Stanlow Refinery in Ellesmere Port, today said it has finalised a new long term working capital facility to fund purchase of crude oil.
"The Inventory Monetisation arrangement with J. Aron & Company covers the supply of crude oil to Stanlow and replaces a similar agreement with Barclays Bank Plc, who are exiting the global commodities business," Essar said in a statement.
The company said it has entered into arrangements for both Inventory Monetisation and Receivables Securitisation.
"Under the new five year deal, J. Aron will provide inventory management services in relation to approximately 5.8 million barrels of crude oil and petroleum products at Stanlow. Management of customer relationships and of product sales processes remain with Essar Oil UK," it said.

In addition, a previous invoice discounting receivables financing arrangement has been replaced with a new three year Pound Sterling 300 million (USD 475 million) Receivables Securitisation arranged by Lloyds Bank Plc.
Essar Oil UK Chief Finance Officer Sampath P said, "The arrangements give both operational and planning flexibility and will help us continue to deliver an excellent level of service to our customers."

Volker Schultz, Essar Oil UK Chief Executive said: "We can now look ahead with renewed confidence. Stanlow is running very successfully and competitively as a single train highly optimised refinery, while ongoing projects to further improve margins will see us making further significant investment to unlock even greater value."

Essar had in August 2011 completed the USD 350 million acquisition of the oil refinery and other associated assets at Stanlow, near Ellesmere Port, Cheshire, from Shell UK Limited.
The Stanlow refinery, near to Ellesmere Port in the north west of England, is the second largest refinery in the UK with a nameplate capacity of 296,000 barrels of oil a day. It supplies approximately one sixth of the UK's petrol and is a key manufacturer of diesel and aircraft fuel.