ONGC to raise $2.5 bn through offshore borrowings

In a single largest offshore five-year loan facility arranged by an Indian company during the last three years, ONGC Videsh Ltd (OVL) has entered into separate agreements with two consortiums of international banks to raise $2.5 billion by way of offshore borrowings to finance its acquisition of 10% participating interest in Rovuma Area I Block in Mozambique.

The first facility for a five year term amounting to $1.775 billion was signed with consortium of international banks — including ANZ, Bank of Nova Scotia, BTMU, DBS, Mizuho, RBS, Societe Generale, SBI and SMBC.

The company had initially planned to raise $1 billion through this long-term facility; however, decided later to upsize the same in view of overwhelming response from the banks.

SMBC took the leadership role in this facility with commitment of $700 million. The second facility is in the nature of a bridge finance of $725 million for a one-year term with another consortium — including ANZ, BNP Paribas, BTMU, Citi, DBS, RBS and SBI.

In April, 2013, the Company had made its inaugural offshore dollar bond offering of dual-tranche Reg-S notes in international markets aggregating $800 million to finance its acquisition of participating interest in ACG field in Azerbaijan and the associated cross-country BTC pipeline.

In January 2014, the company had raised $1.5 billion one-year bridge loan facility from a consortium of nine banks to finance the acquisition of participating interest of 6% in the Rovuma Area I Block in Mozambique offshore from Videocon.

With these three offshore loan facilities and the bond transaction, OVL has raised $4.8 billion from the international market in the current financial year.