Tuesday, July 24, 2012

Essar Oil secures loan facility to repay deferred sales tax liability

Mumbai, July 23, 2012: Essar Oil Limited today announced that it has tied up a new credit facility from domestic banks to provide a credit line of up to Rs 5,000 crore to meet its Sales Tax liability of Rs 6,169 crore.The company continues to pursue the matter of repayment schedule of its sales tax liability both legally and with the Gujarat government. Essar Oil is confident that with this facility tied up it will be in a position to meet its entire payment obligations.

Lalit Gupta, MD & CEO, Essar Oil, said: “The new loan facility will enable EOL to meet its 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 India and internationally.”

As previously announced, the completion of the Vadinar refinery phase 1 expansion and the early completion of the additional optimisation project at Vadinar complete the scheduled capexprogramme for the refinery. With its benchmark low operating costs and enhanced scale and complexity, Vadinar is expected to deliver significantly enhanced margins and cash flow generation in future.

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