UK taxman throws Essar Oil UK lifeline to save Stanlow refinery

London (Quantum Commodity Intelligence) - Essar Oil UK, the owner of 210,000 b/d Stanlow refinery, has been thrown a £400m lifeline by the taxman amid fears it could collapse, according to the Daily Telegraph.

The "time to pay" deal reached with HM Revenue and Customs will ease the pressure on Essar, with government and industry sources confirming it has removed the risk of insolvency.

Two weeks ago, it emerged that Essar was scrambling to secure a refinancing after Lloyds began to withdraw its support.

Details of the deal remain unclear exactly how long the relief period Essar has been given is, but Essar is believed to have been given tax relief for at least six months, although interest will accrue on the amount due during the time.

Last week Essar said it was closing in on a refinancing deal, adding it was hopeful the process would be "concluded swiftly based on the proposals it has received" by the end of June.

Investment fund Apollo is reported to have been involved in talks about fresh funding.