Essar Energy plunges after Supreme Court ruling

LONDON (Reuters) - Refiner and power generator Essar Energy said India's Supreme Court ruled against it in a case on Tuesday, meaning it will no longer benefit from a scheme by which it is able to defer sales tax.

Almost of a quarter of Essar Energy's value was wiped off after the company said Essar Oil , the India-listed business in which it owns an 87 percent stake, would no longer be allowed to defer the sales tax it owes.

Essar Oil has benefited from sales tax payment deferrals of $1.24 billion, the company said.

"This benefit they were getting which is reasonably considerable, they're not going to get going forward. That's going to hit their financials," said an analyst who declined to be named.

He added that the shares were also being hurt by the uncertainty as to when the company would now have to pay back the sales tax it owes. Under the previous deal, the sales tax had been repayable from 2021 onwards.

"The company will provide further information in the matter after studying the judgment passed by the Hon'ble Supreme Court," said Essar Oil in a statement.

The latest ruling invalidates a judgement by the Gujarat High Court in 2008, the state where Essar Oil's Vladinar refinery is located, which ruled in favour of the company being permitted to pay the sales tax in deferred installments.

Shares in Essar Energy, itself 77 percent-owned by privately-held Indian conglomerate Essar Group, traded down 24 percent to 131.4 pence at 1538 GMT, their lowest level since the company listed in London in 2010 and knocking around 540 million pounds off the company's value.

(Reporting by Sarah Young; Editing by Matt Scuffham)