According to institutional sources, lenders have imposed a set of pre-conditions. These include the promoters providing personal guarantee and bringing additional equity to the tune of Rs 311 crore, and EPC contractors - ABB arranging Rs 905 crore, in addition to a deferred credit of $91 million. Besides, Essar Shipping, the group company, will have to provide a Rs 250-crore corporate guarantee. Essar Shipping is building the terminal, which is part of the refinery project to handle the crude and petroleum products.

There will be a convertibility clause under which lenders will have the right to convert loans into equity up to 75 per cent of the total equity capital. According to sources, Essar Oil has recently sold its drilling division (rigs) for $60 million. Part of this money will be invested in the refinery project, sources said. The project, has achieved full financial closure. According to sources, UDHE and KBC Process Technologies Ltd, UK, the consultants appointed by institutional lenders have approved the revised cost estimate. Company officials said they are yet to get the details of the lenders' decision. However, they said the project is complete by 64 per cent and EPC contractors have agreed to finish the work in 24 months on re-start. The work on the project was discontinued in 1999.