Energy major Essar Oil Ltd has exited the corporate debt restructuring (CDR) loan facility set up in December 2004, to help cover the construction of its Vadinar refinery in Gujarat.

The CDR loan facility has been replaced with a new debt facility of about Rs 9,100 crore on commercial terms from a similar group of lenders.

Suresh Jain, Chief Financial Officer, Essar Oil, in a press statement said: “The CDR exit will lead to greater operational and financial flexibility for the organisation.

We have begun the process of swapping our costly rupee debt with cheaper dollar loans that will lower our interest cost significantly, improve our cash flow, and strengthen the balance sheet,” he said.

The company had received RBI’s approval for $2.27 billion to replace its high cost rupee debt with ECBs. Now, with the CDR exit, the company will be able to refinance the remaining rupee loans to ECB, the statement said.