Essar Energy gets 900m dollar loan to cover tax bill

Essar Energy, the India focused energy firm, says its subsidiary, Essar Oil, has agreed a loan facility to pay a tax bill owed to the Government of Gujarat.

The credit facility agreed with several Indian banks is worth $900m against the tax liability of $1.12bn.

Essar is currently going through a legal process to determine the schedule for repayment to the Gujarat authorities.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

Lalit Gupta, Chief Executive Officer of Essar Oil, said: "The new loan facility will enable Essar Oil 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."

The tax issue in Gujarat has been part of the reason Essar shares have fallen 70% in the last 12 months.

BS