India's state-run Oil and Natural Gas Corp plans to raise up to $900 million in the first quarter of 2013 through a dollar bond issue to fund its acquisition in Azerbaijan, a top official said.
Hess Corp said in September it had agreed to sell its 2.72 per cent stake in the large Azeri, Chirag and Guneshli(ACG) group of oilfields as well as its 2.36 per cent stake in an associated pipeline to ONGC for $1 billion.
Currently borrowing in dollars is available at cheaper rate. Our purchase of assets is in dollar and in our balance sheet asset and liabilities are shown in dollars, D K Saraf, managing director of ONGC Videsh, the overseas arm of India's biggest energy explorer, said.
ONGC Videsh Ltd will buy Hess Corp's assets in a deal it expects to close in the first quarter of 2013, the US firm said in September. It is subject to Indian and other regulatory approval, it had said.
A source with direct knowledge of the matter said ONGC Videsh can borrow up to $750 million under the automatic approval route and must seek Indian central bank permission to raise more.
The bond issue will be the first by ONGC Videsh.
If we get permission we will raise $900 milion. Otherwise it will be $750 million, said the source, adding that the borrowings will be made in January.