OIL to raise $900 m debt for Mozambique field stake buy

State-owned Oil India Ltd (OIL) on Wednesday said it will raise $800-900 million in foreign debt to finance its share in the $2.5 billion acquisition of a stake in super-giant Mozambique gas field it is making with ONGC.

ONGC and OIL announced that they will buy Videocon Industries' 10 per cent stake in a supergiant Mozambique gas field for $2.5 billion. The stake will be split 60:40 between OVL, the overseas arm of ONGC, and OIL.

"We plan to go to overseas market to raise 80 to 90 per cent of our share of $1 billion (in the acquisition)," OIL Director (Finance) T K Ananth Kumar said. The borrowing, which will insulate the company from the volatility in the rupee-dollar exchange rate, will be a combination of external commercial borrowing and US dollar bond issue.

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