10 per cent share fall at Essar Energy

Published:  29 Feb at 6 PM

As reported by the BBC, India's Essar Energy shares have dropped by over 10% following the company’s reports of a post-tax loss for 2011. The firm saw a loss of $568 million for the calendar year, in comparison to its 2010 profit of $248 million.

The company said 2011 had seen many challenges, with weaker refining margins and a lower rupee stifling profits at the year’s end. Essar Energy also noted government delays in giving permits to begin mining coal blocks.

The Supreme Court of India ruled in January that the firm could not postpone tax payments. The court decreed that Essar Oil--majority controlled by Essar Energy—would not be able to postpone $1.24 billion in sales tax for refined oil products.

This ruling overturned a lower court's decision which allowed the firm to defer the fee to Gujurat state. Essar Energy's CEO Naresh Nayyar expressed his disappointment in India’s Supreme Court. He added that the firm was seeking a reassessment of the decision.

Essar Energy was listed in 2010 on the London Stock Exchange. The firm is owned by Essar Group, the Indian conglomerate, and is seeking to profit from the country’s rising demand for energy.