ONGC Videsh: To raise up to $1 billion via bonds by April-end
BY SAURABH CHATURVEDI
NEW DELHI -- ONGC Videsh, the overseas investment arm of ONGC, said it aims to raise up to $1 billion via a dollar bond by April-end to fund an acquisition in Azerbaijan.
ONGC Videsh said it finished buying from Hess 2.7% of the Azeri, Chirag and Guneshli fields in Azerbaijan, and 2.4% of the associated BTC pipeline, for a combined $1 billion.
It first announced the deal in September last year.
"It now makes sense to raise cheaper debt through overseas bond issuance" MD D.K. Sarraf told reporters on the sidelines of an industry event.
The company initially planned to issue its maiden overseas bond between January and March, but delayed to complete the acquisition.
Mr. Sarraf said all of ONGC Videsh's assets and liabilities are denominated in dollars, making cheaper refinancing easier. Indian companies are increasingly raising funds overseas because it is cheaper than borrowing at home, as the central bank of India has been holding interest rates steady due to inflationary concern.
ONGC Videsh produced 8.75 MMmt of oil and equivalent gas in the financial year end in March, 2012. It plans to invest $20 billion to acquire overseas assets, to achieve its target of a sevenfold increase in oil and gas output from overseas assets by 2030.
Dow Jones Newswires