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Read more about ONGC borrows Rs 40 billion from ICICI Bank to part-finance HPCL acquisition on Business Standard. Sources said ICICI Bank has extended one-year loan to ONGC to fund the acquisition of government\'s 51.11% stake in Hindustan Petroleum Corp Ltd (HPCL)
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part-finance HPCL acquisition
State-owned Oil and Natural Gas Corp (ONGC) has borrowed Rs 40 billion from
ICICI Bank on top of over Rs 180 billion it has taken from three other banks to part
finance Rs 369.15 billion acquisition of HPCL.
Sources said ICICI Bank has extended one-year loan to ONGC to fund the
acquisition of government's 51.11 per cent stake in Hindustan Petroleum Corp Ltd
ONGC had yesterday stated that it has entered into loan agreements with Punjab
National Bank, Bank of India and Axis Bank Ltd for the borrowing Rs 180.60 billion
for the acquisition.
The pact with PNB is for loan of up to Rs 106 billion and with Bank of India for
another Rs 44.60 billion.
The company is likely to sign-up more loan agreements to pay Rs 369.15 billion to
the government before the month-end.
The acquisition would create India's first integrated oil company. This would be
ONGC's biggest acquisition and second buyout this fiscal after its Rs 77.38 billion
acquisition of 80 per cent stake in Gujarat State Petroleum Corp's KG basin gas
ONGC Chairman and Managing Director Shashi Shanker had on Sunday stated
that the company's board has approved raising of the borrowing limit from Rs 250
billion to Rs 350 billion.
This will be the company's first ever debt.
"We will use our (Rs 120-130 billion) cash first and then the liquid assets and debt
will be last," he had said. "This order can change, because we won't sell the liquid
assets in distress.
Also, we have offers for over Rs 500 billion debt at very competitive rates, both
foreign currency and local."
ONGC holds 13.77 per cent stake in Indian Oil Corp (IOC), which is worth over Rs
260 billion. It also holds 4.86 per cent stake in GAIL India Ltd, which is worth over
Rs 38 billion.
The company had on January 20 announced buying of government's 51.11 per
cent stake in India's third largest state-owned oil refiner and marketing company
for Rs 473.97 per share in an all-cash deal that is to be closed before the month-
Article By - Business Standard