Tax dues: Essar Oil gets Rs 5K-cr credit
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Essar Oil today said it tied up a new credit facility from a consortium of 12 domestic banks to provide a credit line of up to Rs 5,000 crore to meet its sales tax liability of Rs 6,300 crore.
The company continues to pursue the matter of repayment schedule of its sales tax liability both legally and with Gujarat.
Essar Oil is confident that with this facility it will be in a position to meet its entire payment obligations of Rs 6,169 crore, the company said in a statement.
The company did not name the lenders but it has been learnt that the consortium is led by State Bank of India along with ICICI Bank, Bank of Baroda, Punjab National Bank, IDBI Bank, and Bank of India, among others.
The details of the credit line such as the tenor, pricing etc., could not be obtained.
The company has already paid Rs 1,000 crore as first instalment to Gujarat as directed by the Supreme Court last week.
Essar Oil managing director and chief executive Lalit Gupta said: "The new loan facility will enable us to meet the sales tax liability. Our lenders have continued to be very supportive of the business, which remains well placed given the demand for high value fuels both in the country and internationally."
Despite the huge financial burden due to the tax case being lost, the company said, as previously announced, the completion of the Vadinar refinery phase 1 expansion and the early completion of the additional optimisation project at Vadinar are on course.
Post expansion, Vadinar is expected to deliver significantly enhanced margins and cash flow generation in future to the company, it said.
On July 17, Essar Oil had informed the Supreme Court that it would pay Gujarat the sales tax liability of Rs 6,300 crore in instalments, the first of which will be deposited by July 30.
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