Fitch rates Essar Oil loans BBB-(ind)

Fitch Ratings said it assigned Essar Oil Ltd. a national long-term rating of BBB-(ind), along with BBB-(ind) ratings to its term loans of Rs. 42 billion and its external commercial borrowings of $100 million for its phase I refinery expansion project.

The outlook is stable.

The ratings factor in the completion of the company's refinery in Vadinar, Gujarat, Fitch said, and its early-stage exploration and production portfolio.

The ratings are constrained by high leverage and large ongoing capital expenditure of Rs. 78.1 billion, the agency said.

The ratings benefit from the strong operational, strategic and legal linkages between Essar Oil and Essar Global Ltd., Fitch added.

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