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ONGC raises Rs 180 billion loan to part finance acquisition of HPCL

The company is likely to sign-up more loan agreements to pay for acquiring government's 51.11 per cent stake in HPCL for Rs 369.15 billion.

Press Trust of India  |  New Delhi 

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State-owned and (ONGC) today said it has tied-up over Rs 180 billion loan from three banks to part its Rs 369.15 billion acquisition of Corp Ltd (HPCL).

In a regulatory filing, ONGC said it had yesterday entered into loan agreements with Punjab National Bank, Bank of and for the borrowing Rs 180.60 billion for the acquisition.

ONGC said the loans are of one-year duration. The pact with PNB is for loan of up to Rs 106 billion and with Bank of for another Rs 44.60 billion.

With Axis Bank it has secured Rs 30 billion credit.

The company is likely to sign-up more loan agreements to pay for acquiring government's 51.11 per cent stake in HPCL for Rs 369.15 billion.

ONGC is to pay the government for the stake within this month.

The acquisition would create India's first integrated company. This would be ONGC's biggest acquisition and second buyout this fiscal after its Rs 77.38 billion acquisition of 80 per cent stake in Gujarat State Petroleum Corp's KG

ONGC had on Sunday stated that the company's board has approved raising of the borrowing limit from Rs 250 billion to Rs 350 billion.

This will be the company's first ever debt.

"We will use our (Rs 120-130 billion) cash first and then the liquid assets and debt will be last," he had said. "This order can change, because we won't sell the liquid assets in distress. Also, we have offers for over Rs 500 billion debt at very competitive rates, both foreign currency and local."

ONGC holds 13.77 per cent stake in Corp (IOC), which is worth over Rs 260 billion. It also holds 4.86 per cent stake in GAIL Ltd, which is worth over Rs 38 billion.

The company had on January 20 announced buying of government's 51.11 per cent stake in India's third largest and marketing company for Rs 473.97 per share in an all-cash deal that is to be closed before the month-end.

First Published: Tue, January 23 2018. 21:20 IST
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