<div>State-owned Oil India Ltd plans to raise $900 million in foreign debt to refinance a loan taken to fund its share of a stake in a super-giant Mozambique gas field acquired jointly with ONGC.<div> </div><div>Oil and Natural Gas Corp (ONGC) and Oil India (OIL), the nation's biggest state-run explorers, completed the $2.475 billion purchase of Videocon Industries' 10 per cent stake in the Rovuma-1 field in the waters off the African nation in January.</div><div> </div><div>The stake was initially split 60:40 between ONGC Videsh Ltd (OVL), the overseas arm of ONGC, and OIL. <br /><br />Since OVL acquired an additional 10 per cent in the field on its own, OIL got 1 per cent more, thereby equally splitting Videocon's interest.</div><div> </div><div>"OIL had arranged for a short-term bridge loan for one year of $1.3 billion to fund its share," a source with direct knowledge of the development said.</div><div> </div><div>Of this, $1.03 billion was utilised to acquire the initial 4 per cent stake and the remainder will be used to buy the additional 1 per cent interest from OVL. <br /><br />The bridge loan is to be repaid within one year.</div><div> </div><div>OIL plans to raise funds through a mix of foreign currency bonds and long-term external commercial borrowings to refinance the bridge loan.</div><div> </div><div>The source said OIL wants to raise up to $900 million through the issue of US dollar bonds. <br /><br />It has mandated Citi, Deutsche Bank, HSBC, RBS and Standard Chartered as the issue managers.</div><div> </div><div>The borrowing will insulate the company from volatility in the rupee-dollar exchange rate.<br /><br />Raising debt overseas and paying for the acquisition in offshore accounts of the seller would insulate the deal from currency fluctuations, he said.</div><div> </div><div>The Rovuma-1 field holds 45 to 75 trillion cubic feet of gas reserves, which are proposed to be converted into liquid form (LNG) for export to nations including India. <br /><br />"First gas is planned for end-2018," the source said. OIL shares ended at Rs 483.45 on the BSE, down 0.29 per cent. </div></div>
<div>State-owned Oil India Ltd plans to raise $900 million in foreign debt to refinance a loan taken to fund its share of a stake in a super-giant Mozambique gas field acquired jointly with ONGC.<div> </div><div>Oil and Natural Gas Corp (ONGC) and Oil India (OIL), the nation's biggest state-run explorers, completed the $2.475 billion purchase of Videocon Industries' 10 per cent stake in the Rovuma-1 field in the waters off the African nation in January.</div><div> </div><div>The stake was initially split 60:40 between ONGC Videsh Ltd (OVL), the overseas arm of ONGC, and OIL. <br /><br />Since OVL acquired an additional 10 per cent in the field on its own, OIL got 1 per cent more, thereby equally splitting Videocon's interest.</div><div> </div><div>"OIL had arranged for a short-term bridge loan for one year of $1.3 billion to fund its share," a source with direct knowledge of the development said.</div><div> </div><div>Of this, $1.03 billion was utilised to acquire the initial 4 per cent stake and the remainder will be used to buy the additional 1 per cent interest from OVL. <br /><br />The bridge loan is to be repaid within one year.</div><div> </div><div>OIL plans to raise funds through a mix of foreign currency bonds and long-term external commercial borrowings to refinance the bridge loan.</div><div> </div><div>The source said OIL wants to raise up to $900 million through the issue of US dollar bonds. <br /><br />It has mandated Citi, Deutsche Bank, HSBC, RBS and Standard Chartered as the issue managers.</div><div> </div><div>The borrowing will insulate the company from volatility in the rupee-dollar exchange rate.<br /><br />Raising debt overseas and paying for the acquisition in offshore accounts of the seller would insulate the deal from currency fluctuations, he said.</div><div> </div><div>The Rovuma-1 field holds 45 to 75 trillion cubic feet of gas reserves, which are proposed to be converted into liquid form (LNG) for export to nations including India. <br /><br />"First gas is planned for end-2018," the source said. OIL shares ended at Rs 483.45 on the BSE, down 0.29 per cent. </div></div>