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"We are delighted at the confidence shown by leading financial institutions, both in India as well as overseas, in our Rajasthan project and our business. The financing has been completed by accessing two diverse markets on competitive terms in these current challenging times," said Rahul Dhir, managing director and chief executive of Cairn India.
The financing has been arranged through a combination of US dollars and Indian rupee borrowings by accessing both domestic and international markets, the company said in a statement on Wednesday. The proceeds from the facility will be used to repay existing credit of $850 million and to continue funding facilities in Rajasthan.
"This is in line with our strategy of funding development expenditure through debt and realigning the company's capital structure to provide financial flexibility for the future," said Dhir.
The borrowing of $750 million consists of a fully underwritten portion of $500 million by Standard Chartered Bank and a $250 million loan by International Finance Corporation. SBI has underwritten the domestic borrowing portion worth Rs 4,000 crore ($850 million).
"Cairn India is committed to achieve our approved targets and deliver value to all our stakeholders," Dhir said. The resource base has continually grown since the discovery of Mangala in 2004 and the focus in the coming years will be to realise the full potential of the Barmer Basin. The Mangala, Bhagyam and Aishwariya fields together are being developed in sequence and when completed, the production is set to rise to about 175,000 barrels oil per day, the statement said.
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