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| IOC hires banks for first overseas bond sale |
| Bloomberg / Jan 07, 2010, 00:16 IST |
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Indian Oil Corp, the nation’s largest state-owned refiner, hired HSBC Holdings Plc, Standard Chartered Plc and Deutsche Bank AG to help it raise $500 million from its first overseas bond sale.
The notes will help Indian Oil fund projects including a 15 million-tonne-a-year refinery at Paradip in Orissa, Finance Director Serangulam V Narasimhan said on Wednesday.
“When we actually begin raising the money will depend on market conditions,” Narasimhan said. “We haven’t decided on details such as the tenor, interest rates et cetera.”
Indian Oil plans to increase spending by 7.4 per cent to Rs 14,500 crore ($3.1 billion) in the financial year starting April as it builds capacity to meet fuel demand in the world’s second-fastest growing major economy.
With unit Chennai Petroleum Corp the company plans to increase refining capacity to 80 million tonnes of crude a year by 2012 from 60.2 million tonnes after spending Rs 13,500 crore on expansion in the current financial year.
Indian Oil has Rs 7,600 crore of bonds outstanding, all of them denominated in the local currency, according to data compiled by Bloomberg. It has about Rs 47,000 crore of debt in total, including $3 billion of foreign-currency loans, and plans to increase overseas borrowing to benefit from lower costs, Narasimhan said yesterday.
While India’s central bank started to withdraw monetary stimulus in October, it has kept the benchmark reverse-repurchase rate unchanged at 3.25 per cent since April.
The Federal Reserve on December 16 pledged to keep US interest rates “exceptionally low” for an “extended period” to ensure the economy recovers from the worst global recession since the Great Depression. Chairman Ben S Bernanke and his fellow policy makers cut the benchmark rate almost to zero in December 2008.
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