ONGC raises $2.38 billion from banks to buy refinery stake

NEW DELHI (Reuters) - India's top explorer Oil and Natural Gas Corp (ONGC) has secured a $2.83 billion loan from three banks to part fund its $5.8 billion acquisition of state-refiner Hindustan Petroleum Corp, ONGC said on Tuesday.

ONGC, which is raising debt for the first time, said the one-year loan comprised 106 billion rupees ($1.66 billion) from Punjab National Bank, 44.60 billion rupees from Bank of India and 30 billion rupees from Axis Bank.

ONGC, which has cash reserves of 120 billion to 130 billion rupees, has said it could borrow more funds or sell its stake in refiner Indian Oil Corp and gas utility GAIL (India) Ltd to complete the acquisition.

ONGC announced on Saturday it would buy the government's 51.1 percent stake in HPCL for 369 billion rupees.

ONGC Chairman Shashi Shankar told reporters on Sunday that his firm had raised the borrowing limit to 350 billion rupees to help complete the acquisition.

ONGC has a 13.77 percent stake in IOC worth 260.36 billion rupees and a 4.86 percent share in GAIL worth 38.45 billion rupees, based on Tuesday's closing share prices of the two firms.

($1 = 63.7600 Indian rupees)

(Reporting by Nidhi Verma; Editing by Edmund Blair)