ONGC raises Rs1,970 crore through bonds to finance OVL's Imperial acquisition
24 Dec 2009
State-owned Oil and Natural Gas Corporation has raised Rs1,970 crore through an issue of bonds to refinance the debt that its overseas investment arm ONGC Videsh Ltd (OVL) had taken to buy UK-based Imperial Energy.
OVL sold five-year bonds with an 8.40 per cent coupon rate, ONGC director (finance) Dinesh Sarraf told reporters in New Delhi.
In January this year, the company had taken a one-year bridge loan of Rs5,250 crore ($1 billion) to fund the Imperial acquisition. It is now refinancing it through term borrowing.
"We will next issue commercial papers (CP) to raise about Rs1,500 crore," Sarraf said. "We will complete the refinancing before January 10." The company has already garnered $200 million through a three-year foreign currency loan.
OVL had sold one-year commercial paper to about 15 investors on 9 January to partly fund the 1.4 billion-pound Imperial buy. It is now taking term loans to pay these lenders.
For the latest bond issue, Standard Chartered Bank, Trust Investment Advisor, AK Capital, ICICI Bank, ICICI Securities Primary Dealership, SBI Capital Markets, Citibank, Axis Bank, HSBC Bank and Kotak Mahindra Bank were the arrangers.
"The bonds are payable in five-years beginning today," Sarraf said.
