ONGC unit plans to raise $900 mn in bonds
A unit of state-run Oil and Natural Gas Corp plans to raise up to $900 million in the first quarter of 2013 through a dollar bond issue to fund an acquisition in Azerbaijan, a top official said.business Updated: Nov 23, 2012 21:47 IST
A unit of state-run Oil and Natural Gas Corp plans to raise up to $900 million in the first quarter of 2013 through a dollar bond issue to fund an acquisition in Azerbaijan, a top official said.
ONGC Videsh, part of India's largest energy explorer, has hired Deutsche Bank, Citigroup and RBS for the fund raising, two sources with direct knowledge of the deal told Reuters.
The firm is expected to issue bonds with 5- or 10-year tenure and the deal is expected to hit the market in January after the documentation process is complete, the sources said.
"Currently borrowing in dollars is available at cheaper rate. Our purchase of assets is in dollar and in our balance sheet asset and liabilities are shown in dollars," said DK Saraf, managing director of ONGC Videsh.
Hess Corp said in September it had agreed to sell its 2.72% stake in the large Azeri, Chirag and Guneshli(ACG) group of oilfields, as well as its 2.36% stake in an associated pipeline to ONGC for $1 billion.
Indian issuers can borrow up to $750 million in markets abroad under the automatic approval route and must seek Indian central bank permission to raise more.
"If we get permission, we will raise $900 million. Otherwise it will be $750 million," said a separate source, adding that the borrowings will be made in January.