OVL to raise Rs 5,190 cr loans to meet capex in FY15
May 13 2014 , New Delhi
The fund raising will be besides the long-term debt the company plans to take to repay bridge, or short-term financing, it had resorted to fund acquisition of 16 per cent stake in a giant gas field in Mozambique for $4.125 billion.
"Our planned capex for 2014-15 is Rs 14,792.09 crore. Of this, Rs 9,602.45 crore will be met from internal resource generation (revenue from sale of oil and gas) and the remaining Rs 5,189.64 crore will have to be raised in loans," a senior company official said.
OVL, which had an capex of Rs 10,891.41 crore in 2012-13, saw planned expenditure jump to Rs 36,117.46 crore last fiscal as it made the Mozambique acquisitions. Of this, Rs 11,958.11 crore came from internal resources and the rest Rs 24,159.35 crore was borrowed.
Last year, OVL teamed up with Oil India Ltd (OIL) to buy Videocon's 10 per cent stake in Mozambique's Rovuma Area 1 for $2.475 billion.
Subsequently, OVL on its own bought another 10 per cent stake in the same field from Anadarko Petroleum Corp of the US for $2.64 billion. The 10 per cent stake of Videocon was split in 60:40 ratio and total payout for OVL for the back-to-back acquisitions was $4.125 billion.
"For the Videocon acquisition, we raised a bridge finance (or short-term loan) of $1.5 billion. For purchase of Anadarko stake, we had raised a 5 year term loan of $1.775 billion and $725 million in bridge finance," he said.
The bridge finances have to repaid or replaced with a syndicated loan within one year - January 2015 for $1.5 billion raised for Videocon acquisition and February 2015 for $750 million of Anadarko purchase.
"We are exploring various options including raising funds through US dollar bonds and euro bonds market. We also have option of taking loan against sale of crude oil," he said.
In the oil-for-debt deal, the company will sell a portion of the future crude oil production to banks and financial institutions.
OVL in 2013-14 produced 5.491 million tonnes of crude oil from its various properties in countries from Russia to Venezuela. It is looking at raising $500 to 700 million of loan from sale of crude oil, the official said.
The 3-to-5 year loan can be raised by selling future oil production from any of the company's producing assets in Russia, Azerbaijan or Brazil.
The remaining of the $2.225 billion fund OVL needs by February 2015 can be raised from US dollar and euro bond issues and syndicated loans.