July 23, 2012 / 14:00 IST
Refiner Essar Oil has tied up a loan facility for Rs 5000 crore with local lender State Bank of India to help settle a large sales tax liability, it said on Monday.
Essar Oil, 87%-owned by London-listed Essar Energy
, has been negotiating with the government of Gujarat for more time to pay USD 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 Rs 1000 crore 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% down at Rs 54.70 in a weak Mumbai market. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
