Cost of buying Stanlow assets can inflate: Essar Energy

Essar Energy may have to pay more than its originally estimated USD 1.3 billion for the acquisition of Stanlow Refinery and its assets.

That's because as per the agreement with Stanlow, its inventory of crude oil and oil products has to be bought at the prevailing market price, and rising crude prices mean additional cost for Essar Energy. This inventory was valued at USD 780 million in February 2011. The company says it had intended to finance this acquisition through third-party debt, but if this debt is not available to fund the inflated cost, it will have to look at internal resources.