THE owners of the Stanlow Oil Refinery have reported an improved financial situation, following speculation about the company's future.

Last week Essar admitted it had had a "very difficult 12 months" due to the Covid pandemic, and there was speculation nationally the firm was on the verge of collapse following high-level resignations and Lloyds Bank changing the terms of a credit facility.

But the owners of the refinery by Ellesmere Port, which directly employs about 900 people, said the financial picture is looking positive.

Essar Oil UK reported that sales of products from the Stanlow Refinery are expected to see a 63 per cent year-on-year increase to 537kT in April 2021, in comparison to 329kT in April 2020, when the Covid pandemic had forced much of Europe into a strict lockdown.

By way of comparison, sales in February 2020, before the effects of the Covid pandemic became known, were 661kT.

These figures confirm that earnings before interest, tax, depreciation and amortisation for April 2021 are expected to be positive for the first time since the coronavirus pandemic and subsequent national lockdowns began in March 2020.

The firm added projections for subsequent months look increasingly positive, as the easing of lockdown restrictions has resulted in increased demand for road transport and aviation fuel.

Essar has again stressed the company is not levered and has no long term bank debt.

It added: "Stanlow continues to produce and sell high value products, with a value of approximately US$700 million a month. Demand has been increasing since February 2021 and has continued to do so during the current month.

"Some short-term financial disruption was caused recently when a bank decided to amortise a credit facility related to the company’s receivables. In practical terms, this facility allowed the company to be paid immediately for sales, rather than waiting for up to 30 days.

"This change did not, however, have a material impact on the company’s operations or financial outlook. More than half of the facility has, in any event, quickly been replaced by securing alternative financing facilities.

"We are confident that replacement arrangements for all the facility will be secured in the near term, but as previously stated, this will not effect operations at Stanlow.

"The company has always sought to implement the highest standards of corporate governance. We are well advised by a suite of highly experienced, professional firms."

A spokesperson added: “As lockdown restrictions ease and the country returns to normality, demand for our products is already increasing.

"All factors indicate that this is likely to continue and therefore our financial position will strengthen over the coming months.

"In the four years to 2019, the company generated EBITDA of over US$300 million a year. Any short-term disruption is mitigated by the underlying strength and outlook of our business.

"We remain fully focused on supporting the customers and industries who rely on our products.”

The Stanlow Oil Refinery is considered vital to the UK's transport sector, providing 16 per cent of the nation's fuel.

It has been reported recently that Essar is in talks with the Government as well as finance organisations over potential support, as demand for fuel dropped in the past year due to restricted travel.