July 2010 - Market Cap of £6bn ; Founded in 1969.
Floated on the LSE in May 2010
Indian parent Company Essar Group comprising Essar Oil & Gas, Essar Power.
Specialising in power generation & oil & gas operations in India

http://www.essarenergy.com/

Correction: Supreme Court order on Sales Tax Case
RNS
RNS Number : 7163V
Essar Energy plc
17 January 2012





Correction: Supreme Court order on Sales Tax Case



January 17 2012: Essar Energy plc's [LSE: ESSR] subsidiary Essar Oil Limited today made the following announcement to the Bombay Stock Exchange:



Today, the Hon'ble Supreme Court has set aside the judgment of the Gujarat High Court by which Essar Oil was entitled to avail of Sales Tax Deferment Scheme, ie, to pay Sales Tax to the State government in deferred installments. The company has availed of approximately INR 63 billion (approximately US$1.235 billion) of Sales Tax benefit which was to be paid in deferred installments.



The company will provide further information in the matter after studying the judgment passed by the Hon'ble Supreme Court.





Notes to editors:

1. This case relates to the Gujarat state's Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000.

2. The Supreme Court of India set aside the earlier judgment of the Gujarat High Court that extended time to Essar Oil Limited for the commencement of commercial production of the Vadinar Refinery. Under the original incentive scheme the Vadinar refinery was required to commence commercial production by 15 August 2003 but the actual commencement of commercial production was after this date. Sales tax collected to date totals approximately US$1.25 billion.

3. Essar Oil Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India and is a subsidiary of Essar Energy, which owns 87.1 per cent of the shares.

Did not like the sound of the chairman.

Dont fill your boots as the Sunday Times said. :-))

Has there been any comment by The Sunday Times since they tipped it

It was only last Sunday they tipped this company. This news as I take it only come out today on the RNS. Your not going to invest are you aldwickk. :-))

No , but it could be worth a small punt

Sorry it was tipped 1st Jan, have not seen a article about the tip. Being fair they like all investors had no idea this RNS would come about.

Put £50 in in the morning and it will be a £5 by close. lol . You never know could be a good investment.

In India, Essar fallen 11% today.

this has been a stinker from Day1

Morgan Stanley note:
Yesterday’s court ruling in India could see Essar having to pay up to £650m in tax to the Gujarat state government, which ultimately could lead to default of loans at Essar Oil. This could lead to further defaults for the convertible bond and Stanlow working capital facility. Essar is looking to appeal the Supreme Court’s decision.

What has happened? Essar Oil, a subsidiary 87% owned by Essar Energy, received a negative ruling from the Supreme Court of India yesterday. This relates to a tax benefit for Essar Oil at its refinery facility (Vadinar) in the state of Gujarat. In the 1990s, to encourage investment in the state, Gujarat allowed certain tax holidays. Essar initially started building its refinery in the 1990s, but due to a severe cyclone, this disrupted building, and consequently it was not completed until 2008. The company went to the state high court to be allowed to receive the tax benefit, as it argued that the delay was outside of its control. It was granted this benefit. This decision to reverse at the Supreme Court repeals the state’s high court decision.

What is the tax benefit? Essar Oil is allowed to collect sales tax on goods sold, and does not have to pay this back to the state of Gujarat until 2021 (or until it exhausts its limit, which is Rs91bn).

Can Essar appeal? It believes it can put in a review petition to get the judgment reviewed again. This could take up to three months to get a decision.

How quickly will the tax have to be paid? This is unclear, but could be important. Under the current terms of repayment, the tax should be paid back in six equal annual instalments. The judgment from the Supreme Court is unclear on whether this holds, or whether an immediate payment will be required.

Is Essar Oil in default? Technically yes, but Essar had been negotiating with lenders to reorganize the structure and remove the sales tax issue as a covenant. We expect the lenders to wait to see the outcome from the legal process before taking further action.

Essar Energy is bouncing back after yesterday's sell-off, which was sparked by an Indian tax ruling. Essar Oil , the Essar subsidiary hit by the ruling, is examining all legal options and expects to file a review petition in the Supreme Court within the next 30 days.

. The oil refiner’s shares crashed earlier this week after an Indian court ruled the company can no longer benefit from a tax referral scheme. Having since recovered some of those losses, Essar slid 16.2 to a new low of 120p as Goldman Sachs (NYSE: GS - news) cut its price target to 190p from 280p.

“We believe the company’s growth story with a top quality refining asset, attractive exploration and production opportunities in India and large power plants about to be delivered remains attractive,” said analysts. “However, the Supreme Court verdict puts pressure on the company’s liquidity position.”

Analysts at JP Morgan Cazenove one of the banks that brought Essar to market in 2010 were also considering the impact from the ruling. If the sales tax deferral benefit is removed, they estimated that could cut their earnings-per-share estimate for 2011-12 by 44pc to 45pc, but they nonetheless held onto their “overweight” rating.

Bought a few @116.20 , this morning

If Indian law is anything like how's , which I think it is, then they could drag this out though the court's and the payment would be put on hold until a final decision is made . And this would give them time to renegotiate the payment or some other way to settle it.

Yes, aldwickk, but the drawback for investors is apparent.
Look at what happened to VED, in part due to the
interference or procrastination of those who are supposed
to make us believe that the system has become less bureaucratic!

I bought at 116 and sold out @ 123 for a daytrade , EK [Simon C ] did the same for a 10p profit

LONDON (ShareCast) - The share price of India-focused integrated energy company Essar Energy (Dusseldorf: 11224817.DU - news) increased by over a tenth on Monday afternoon after the firm increased its best estimate contingent resources at the Raniganj coal bed methane exploration block. Total (Other OTC: TTFNF.PK - news) proven and probable reserves at the block came in at 113bn cubic feet (bcf) gross, or 18.8m barrels of oil equivalent (mmboe). As such, best estimate contingent resources are now 445 bcf gross, or 74.1mmboe, compared with the previous evaluation, carried out in December 2009, which showed 201bcf gross, or 34mmboe

Morgan Stanley has upgraded ESSR from underweight
to equal-weight and raised the target price from 160p
to 230p.

Trading statement on the 27th Feb. Can't decide if this is the bottom or not.