Essar Energy Share Discussion Threads

[muffinhead] 29/8/2012 17:23

fundamentals always come out in the charts first

[forwood] 28/8/2012 14:10

Aug 23 - Fitch Ratings has affirmed India-based Essar Oil Ltd's (EOIL) National Long-Term Rating at 'Fitch BBB-(ind)'. The Outlook is Stable. A list of addition rating actions is provided at the end of this commentary.

The affirmation reflects the likely improvement in EOIL's credit metrics from FY13 (year end March) onwards, in line with Fitch's expectations, given the end of the company's capex cycle. The improvement in adjusted debt/EBITDAR would be driven by higher operating cash flows from higher capacity and gross refining margins (GRMs) as well as from positive free cash flows (FCF). This would also support EOIL's liquidity profile. As on March 2012, EOIL's adjusted debt stood at INR292bn (including INR46bn off-balance sheet debt) and adjusted debt/EBITDAR was 21.8x.

Fitch also notes that in August 2012 EOIL received approval for exit of corporate debt restructuring (CDR) loan facility set up in December 2004 which facilitated construction of its refinery in Gujarat. The CDR facility will be replaced with a new debt facility on mutually acceptable commercial terms from similar group of lenders.

Also, refinancing risks in FY13 would be low and limited to the repayment of interest accrued on deferred sales tax liability - currently treated as a contingent liability. The receipt of an INR50bn credit facility in July 2012 has partially offset the possible negative impact of the materialisation of the deferred sales tax liability (INR61.7bn). Fitch also notes that the company has paid INR10bn to the Gujarat government towards sales tax due, as directed by the Supreme Court in response to EOIL's writ petition filed in July 2012 on principal repayment schedule and waiver/remission of interest in the sales tax issue.

The completion of EOIL phase I refinery expansion in Q412 and the phase I optimisation project in June 2012 (four months ahead of schedule) marks the end of the company's capex cycle. EOIL total refining capacity has increased to 20mmtpa from its initial nameplate capacity of 10.5mmtpa; complexity has increased to 11.8 from 6.1. This would result in higher gross refining margins as the refinery can now process cheaper heavy and tough crudes to produce higher value-added products. Current price GRM was USD4.23/bbl in FY12.

Fitch notes that EOIL will incur further capex amounting to INR28,000m for its exploration business; of this 23% has already incurred been in FY12 and the balance is expected to be spread over a three-year time frame and funded by debt and equity.


WHAT COULD TRIGGER A RATING ACTION?

Positive: Future developments that may lead to positive rating action include high capacity utilisation and an expansion in EOIL's GRMs resulting in adjusted debt/EBITDAR below 5.0x on a sustained basis.

Negative: Future developments that may lead to negative rating action include a lower-than-expected capacity utilisation and/or expansion in GRMs or significant debt led capex resulting resulting in below-than-expected improvement in adjusted debt/EBITDAR.

EOIL's total throughput in FY12 declined to 13.49mmt (98m barrels) from 14.76mmt (107m barrels) in FY11, due to the planned shutdown (throughput loss of 1.40 mmt) of 35 days in H1FY12. Revenue (adjusted for the deferred sales tax benefit) in FY12 increased to INR573.5bn from INR458.4bn in FY11 due to better product realisations, and EBITDA improved to INR13.2bn from INR12.8bn to due to an improvement in GRMs. However, EBITDA margin declined slightly to 2.3% from 2.8% due to higher operating costs. During FY12, EOIL's financial profile was negatively impacted by the reversal of the deferred sales tax liability. As a result, EOIL incurred a net loss of INR42bn versus a profit of INR6.5bn in the prior year.


Fitch has also affirmed EOIL's bank loan ratings as follows:

- INR53.33bn long-term loans: affirmed at National Long-Term 'Fitch BBB-(ind)'

- USD100m (INR4bn) long-term loan: affirmed at National Long-Term 'Fitch BBB-(ind)'

[forwood] 28/8/2012 10:40

Well I don't use weekly measures for TA and the 100p price low today marks support at the last low from which it bounced previously by 50%. Am going long here.

[muffinhead] 25/8/2012 11:17

if you use a weekly timeframe, you have a new closing low

possible TA target 50p

[rajaster] 25/8/2012 02:09

Double bottom near 100p.. With the current agm dispute of voting out the chairman now adding to the already long list of problems after the tax dispute. Real messy siutation..

[topdoc] 24/8/2012 20:04

dont worry its not going bust therefore will reverse see what happened at tsco kgf etc.buy when it starts reversing probably might drop to 100 or just below and then who knows

[rajaster] 24/8/2012 15:55

100p here she comes..what a pile of junk is this org.

[muffinhead] 22/8/2012 19:25

Slow Slow grind south hugging the underside of the 20 ema...distribution to whoever wants this

[hvs] 14/8/2012 11:58

Them Desis really cook a good curry, power or no power.

Corrupt to THE CORE

[brucie5] 02/8/2012 09:52

No comment on how the recent power outages in India might impact on this..? Two days without power for major economic hubs.

[fangorn2] 30/7/2012 18:14

Yep, plenty of opportunities to make money supplying India' power needs!!

Gov't can't sit by and do nothing when its electorate have no power - a disgruntled populace is bound to encourage the government to pull its fingers out.
Plenty of opportunities to make a profit for the well connected or suitably able companies.

[azza8] 30/7/2012 16:59

ENOUGH SAID!!

[badmumba] 02/7/2012 11:27

Ninja , up again ,i'm sure you'll be back on a day when its down a few pence .
Look for 150p if the market holds up and we dont have any more surprises re Europe.

[badmumba] 01/7/2012 12:29

Funny it went up Thursday on a bad day and again Friday ,Ninja come back if it hits your 14p and i'll give you credit ,but who is more on the right side at the moment ? me... its going up not down ,i can take a 20% profit at the mo ,however i'm looking for 150p ,if i'm wrong i'll stop out.
Oh and by the way it hit slightly less than 101 i think a fraction below a pound .

[hvs] 29/6/2012 17:55

lol !!!!!

bad mumbai is in his element.

Who let him in ????

[hvs] 27/6/2012 20:01

Very Incredible,

They all has their money stashed away in Swizerland via Mauritius.

Wherever there is a Desi about there in no transperency and there is a hand in the till.

[ninja 19] 27/6/2012 19:35

Put that dog down. Seize their assets soon, it will go belly up.

25% shares float, Hahahaha.


The con is unravelling.


Rupees has a long to go, it will be 100 to 1 US$ soon, and that will be the end for this dog, and many dodgy companies from India.


You can say, it's incredible India

[hvs] 27/6/2012 09:21

Plenty of temples in India.

The Ruia might have one in their home.

A miracle is what they must have asked for.