However, it needs to be clarified that the scheme was not for sales tax exemption but was only for a deferment of payment of Sales tax.

Essar Oil would like to further clarify the following:

The sales tax deferment benefit to Essar Oil was a loan repayable on the earlier of 2021/22 or on exhaustion of the full eligible amount (which the company expects to be FY 2013-14) in six equal annual installments

The quantum of the sales tax deferment benefit as per the Company’s estimate is Rs 9,100 crore.

Against this Essar Oil has utilised approximately Rs 6,300 crore as benefit under the sales tax deferment scheme

Following the Supreme Court order, any repayment schedule is expected to be discussed and finalised with the State Government of Gujarat and / or Court.

The sales tax deferment liability has been assigned. As of 31st December 2011, the amount assigned is Rs 1,800 crore. This amount is repayable in accordance with the terms of the agreement.

Exiting the Corporate Debt Restructuring (CDR) scheme

· Essar Oil is already in discussion with CDR lenders for exiting the CDR. This process of exiting CDR is expected to be completed shortly.

· As regards the Master Restructuring Agreement (MRA), Essar Oil is required to obtain approval of the deferment of the sales tax by March 31st, 2012 and repay the same as per the incentive scheme.

· Till date the company has already availed Rs 6,308 crore till Dec 31, 2011.

· Essar Oil is examining all legal options and it expects to file a review petition in the Supreme Court.

· We are discussing the developments with the lenders to the company and there is no Event of Default (EOD) under the financing agreements.

Above Business Release Sourced by Citiesbazar through
VISHAL MEDIA (P.R.Agency), Mobile 098266-23100, Email- pr@vishalmedia.com