ONGC funding for Imperial takeover will be loan to its arm

State-run Oil and Natural Gas Corporation will treat the entire funding of $2.8 billion for the proposed takeover of LSE-listed Imperial Energy Corporation by its foreign arm ONGC Videsh as loan in its book.

"There is no need to change the capital structure in ONGC Videsh despite its large takeover bid for Imperial. The entire funding will be provided as loan to them," ONGC Chairman and Managing Director R S Sharma told PTI.

"We have already provided financial support to ONGC Videsh to the tune of Rs 12,000-13,000 crore in the past as loan," he said.

The capital of ONGC Videsh is Rs 1,000 crore and the takeover of Imperial will take another Rs 11,200 crore approx.

Asked how ONGC will fund the acquisition, Sharma said, "We are a cash rich company and funding is not a problem. ONGC has reserves of about $4.3 billion and out which cash of $2 billion.

"We will go for $1 billion bridge funding and rest $1.8 billion would be from internal resources," Sharma said.

He said, "The 45 days from the bid are very crucial. I am deliberately not speaking much on details as it may create problems. If everything runs smoothly, we expect to crystallise the deal in the next 45 days."