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.

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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