Bharat Petroleum Corporation (BPCL) plans to raise $500 million (Rs 3,300 crore) in dollar bonds by mid-November to meet its capital expenditure target of Rs 8,000 crore for the financial year ending March 31, 2018.
K Sivakumar, director (finance), BPCL told FE, “Of the Rs 8,000 crore capex planned for FY18, we will raise $500 million from abroad via bonds. We have evaluated all options, and most likely, we will go for dollar-linked Singapore papers by the end of October or mid-November.” BPCL’s four major refineries at Kochi, Bina, Mumbai and Numaligarh are on expansion mode and a major part of the proceeds raised would go towards funding these expansions. The company is also setting up petrochemical units, new pipelines and buying oil and gas assets abroad, which would require funding in due course.
Though the official declined to comment on interest rates for bonds, he said BPCL papers are rated very high on par with sovereign ratings, and they are hopeful they can leverage their recently-gained Maharatna status to further bargain on interest rates from lenders. But he cautioned that the firm would still have to compete with seven other Maharatna companies, such as IOC and GAIL. BPCL in January raised $600 million by selling 10-year dollar bonds to investors in Asia and Europe. The firm will also look at Indian rupee loans in future to raise the remaining `4,700 crore of the capital expenditure requirement for the full year, Sivakumar said.