New Delhi: State-owned Oil and Natural Gas Corp (ONGC) said Thursday that it plans to raise up to USD 2 billion in overseas borrowings through a unique and flexible, Singapore-listed debt instrument that provides it with an option to raise funds at short notice. The funds so raised can be used to repay about Rs 15,000 crore of the company’s existing borrowings, fund acquisitions or meet project/asset expenses.
In a press statement, ONGC said it has ‘set up a Euro Medium Term Note (EMTN) programme of USD 2 billion which will be listed on the Singapore Stock Exchange’. The EMTN programme would enable ONGC or any of its subsidiaries to go to market at short notice, say five to 10 days, to borrow funds any number of times within a one-year period.
For the current EMTN programme, ONGC, its overseas arm ONGC Videsh Ltd (OVL) or its subsidiaries can access the market.
ONGC, the country’s top oil and gas producer, is implementing multi-billion dollar projects within the country to bring to production new discoveries or increase output from existing fields. Its overseas arm is on the prowl for acquisitions besides providing funds for the 41 projects the company has in 20 countries.
Both companies have accumulated debt on their books because of acquisitions they made in recent times. ONGC exhausted all its cash and became a net debt company last year when it bought government stake in Hindustan Petroleum Corp Ltd (HPCL) for Rs 36,915 crore and Gujarat government firm GSPC’s stake in a KG basin field for Rs 7,738 crore.
“An EMTN programme is an uncommitted facility and any drawdown thereof under this document would be subject to funding requirements. This is a landmark achievement for ONGC as it is amongst a select few corporates and India’s first oil and gas public sector integrated energy major to set up an EMTN programme,” a statement released by ONGC said.
ONGC CMD Shashi Shanker said the EMTN programme is a landmark achievement for ONGC as it would further enhance the company’s credit profile amongst global investor base.
“We have embedded structural features in the programme which would allow ONGC, ONGC Videsh or its subsidiaries to access international markets within a shorter time frame,” said Shashi Shankar. “We do believe this programme will assist in meeting our strategic financing requirements for our organic or inorganic growth prospects due to our vision of becoming an integrated energy major of global reckoning,” added the top official.
PTI