New Delhi: Essar Oil on Saturday reported a loss of Rs 515 crore for the three months ended March, 2012, due to reversal in sales tax benefits and provisioning related to corporate debt restructuring.

It had a profit of Rs 321 crore in the year-ago period. Meanwhile, gross revenues of Essar Oil rose to Rs 19,160 crore in the 2012 March quarter from Rs 14,846 crore in the same period a year ago, it said in a statement. The higher revenues came on the back of increase in product prices.

However, the quarterly performance was hit by decline in gross refinery margin, reversal of sales tax benefits and provision of Rs 322 crore for Corporate Debt Restructuring (CDR) exit proposal.

For the full year ended March 2012, Essar Oil posted a loss of Rs 4,199 crore. The company had a profit of Rs 654 crore in 2010-11 financial year.

The company said the CDR exit proposal has been approved by majority of its lenders and the process is expected to be complete in the current quarter.

"CDR exit would provide operational flexibility and an opportunity to reduce cost of debt," it added.

Following rejection of its review petition by the Supreme Court regarding repayment of deferred sales tax, the company had made representation to the Gujarat government.

As the issues could not be resolved amicably with the government, the company filed a writ petition in the Gujarat High Court to seek direction on the repayment installments and interest of its sales tax deferral liability to the government.

Essar Oil said the Gujarat High Court has fixed the next hearing for June 22.

"The company has already provided Rs 4,015 crore as an exceptional item in its book as reversal of sales tax incentive income in Q3 FY12 and considering the net accretion of Rs 53 crore in Q4 FY12 on account of defeasement, the net reversal for the year is Rs 3,962 crore," the statement said.

Essar Oil's net worth stood at Rs 3,613 crore for the year ended March 2012. In the year-ago period, the same was at Rs 6,538 crore.

"With our capex funding requirement coming to an end, ensuing (Corporate Debt Restructuring) CDR exit, and benefits of higher capacity and complexity will soon be visible in terms of incremental operational cash flows, which will be utilised to deleverage the balance sheet and boost our valuation," Essar Oil Chief Financial Officer Suresh Jain said.

(Agencies)

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