OVL to raise $2.5 bn in offshore funds

In the single largest offshore five-year loan arranged by an Indian company in the past three years, ONGC Videsh (OVL) has entered into agreements with two consortia of international banks to raise $2.5 billion. This would be used to finance its acquisition of 10 per cent participating interest in the Rovuma Area-I Block in Mozambique.

The first loan arrangement for five years amounting to $1.775 billion was signed with a consortium including ANZ, Bank of Nova Scotia, BTMU, DBS, Mizuho, RBS, Societe Generale, State Bank of India (SBI) and Sumitomo Mitsui Banking Corporation (SMBC). The company had initially planned to raise $1 billion through this long-term facility. SMBC took the leadership role in this arrangement, with a commitment of $700 million.

The second arrangement is in the nature of bridge finance of $725 million for one year with a consortium including ANZ, BNP Paribas, BTMU, Citi, DBS, RBS and SBI. In April 2013, the company made its inaugural offshore dollar bond offering of dual-tranche in international markets, aggregating $800 million, to finance its acquisition of participating interest in ACG field in Azerbaijan and the associated cross-country Baku-Tbilisi-Ceyhan pipeline.