India Essar Oil in talks with SBI for $1.2 bln loan-report

NEW DELHI, April 17 Mon Apr 16, 2012 11:41pm EDT

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NEW DELHI, April 17 (Reuters) - India's Essar Oil is in advanced talks with the State Bank of India to arrange a six-year loan to pay 63 billion rupees ($1.2 billion) in sales tax to a state government, the Business Standard reported on Tuesday.

Essar Oil, 87 percent owned by London-listed Essar Energy Plc, had deferred $1.24 billion under a tax benefit provided by the western state of Gujarat, where its Vadinar refinery is located. In January, India's top court ruled that Essar oil was not allowed to defer the payment.

An Essar spokesman told the newspaper that the company was talking to banks for loans to support the payment to Gujarat government, if required. The paper cited an unnamed SBI executive confirming that Essar had approached the bank.

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