Web Sify
Follow us on
Mail
Print

Hindustan Petroleum plans $350-mn bond issue

Source : BUSINESS_STANDARD
Last Updated: Sat, Dec 08, 2012 18:57 hrs

pAfter Oil and Natural Gas Corporation ONGC government-controlled Hindustan Petroleum Corporation Ltd HPCL has set the ball rolling for tapping the overseas bond market The oil marketing company OMC plans to raise around 350 million this yearppThe company is already in the process of raising 400 million in external commercial borrowings ECB A senior company executive told Business Standard that after closing the ECB the firm will go in for bonds &ldquoThe Reserve Bank of India RBI allows companies to raise 750 million overseas under the automatic route After raising ECBs the remaining sum will be raised through bond&rdquoppAt the current rates foreign funds are around 200 basis points cheaper than domestic fundsppAlthough the market sentiment has improved for government-owned companies OMCs such as HPCL are heavily dependent on borrowings due to the subsidy burden they carry for selling diesel and cooking fuels below market pricepp&ldquoWe are getting ratings in preparation for the borrowing programme&rdquo said the HPCL executive HPCL&rsquos marketing peer Bharat Petroleum Corporation Ltd BPCL had in October raised 500 millionppUnlike the OMCs ONGC does not have any pressing need to raise money However its overseas arm ONGC Videsh is likely to raise around 900 million in the overseas bond in January 2013 The first-ever bond issue from the company is aimed at testing the overseas money market for a company that has drawn huge capex plan and has largely been dependent on its parent for funding acquisitionsppONGC has hired Citigroup RBS and Standard Chartered to rate the bond sale Proceeds would be used to fund an acquisition of a stake in Azerbaijan oilfields Of the 900 million the company is planning to raise 750 million can be borrowed under the automatic approval route For the balance however the company will have to seek the permission of the RBIp


More from Sify:
blog comments powered by Disqus
most popular on facebook
talking point on sify finance