Essar Oil ties up funds to repay tax dues

ESSAR-OIL-LOAN:Essar Oil ties up funds to repay tax dues

Refiner Essar Oil has tied up a loan facility for 50 billion rupees with local lender State Bank of India to help settle a large sales tax liability, it said on Monday.

Essar Oil, 87 percent-owned by London-listed Essar Energy , has been negotiating with the government of Gujarat for more time to pay $1.2 billion in sales taxes.

Essar operates its 360,000 barrel-per-day refinery at Vadinar in that state.

The Supreme Court directed the company last week to pay the Gujarat government 10 billion rupees by July 30, while lifting a freeze on the company's bank accounts enforced by the tax authorities.

 

Essar said it hopes to meet its entire tax obligations with the new loan facility and that it is also pursuing legal options to seek more time to repay the tax dues.

The company did not detail the terms of the loan.

At 11.53 a.m. (0623 GMT), Essar Oil shares were trading 0.55 percent down at 54.70 rupees in a weak Mumbai market.