Essar Oil Ltd on Thursday received approval for exit of corporate debt restructuring (CDR) loan facility from its lenders.
The facility set up in December 2004 was used for construction of its refinery in Gujarat.
The CDR facility would be replaced with a new debt facility of about Rs 9,400 crore on mutually acceptable commercial terms from similar group of lenders.
Essar Oil Chief Executive Officer Lalit Gupta, said: “The exit marks a significant step forward for the company. The new loan facility, along with the recently completed expansion of the refinery, paves way to move positively into a new phase of growth.”
The refinery, which commenced commercial production in May 2008 with a capacity of 10.5 million metric tonnes per year (220,000 barrels per day) and complexity of 6.1, has been significantly upgraded in recent months and has a capacity of 20 mmtpa.
Last month, the company secured Rs 5,000 crore from a consortium of 12 banks to meet most of its Rs 6,169-crore sales tax dues to the Gujarat government.
On January 17, the Supreme Court had rejected the company’s 125 per cent sales tax deferment benefit claim on its investment in the Vadinar refinery project. The tax benefit was an incentive by the Gujarat government for Essar to start production at the Vadinar refinery by August 15, 2003. Since the deadline was missed, the company had lost the right to defer the sales tax payment by 17 years.
