India’s ONGC to raise $900m in bonds to fund acquisition in Azerbaijan
India's Oil & Natural Gas Corp. (ONGC) plans to raise up to $900 million dollars in the first quarter of 2013 through a dollar bond issue to fund an acquisition in Azerbaijan, Reuters reported with the reference to a top official said.
In early September, the American Hess company agreed to sell its share in the development project of Azeri Chirag Guneshli oil fields (2.72 per cent), as well as 2.36 per cent stake in Baku Tbilisi Ceyhan pipeline to ONGC.
The transaction value is estimated at $1 billion, the report stated. The company expects to complete the transaction in the first quarter of 2013.
Two sources with direct knowledge of the deal told Reuters that Indian company's unit ONGC Videsh, has hired Deutsche Bank, Citigroup and RBS for the fund raising.
According to the sources, the firm is expected to issue bonds with 5- or 10-year tenure and the deal is expected to hit the market in January after the documentation process is complete.
Reuters reported that Indian issuers can borrow up to $750 million in markets abroad under the automatic approval route and must seek Indian central bank permission to raise more. "If we get permission, we will raise $900 million. Otherwise it will be $750 million," a separate source with direct knowledge of the matter said.
Production at Azeri-Chirag-Guneshli oil field, located about 100 kilometers east of Baku in the Caspian Sea, was launched in 1997.
The shares in the contract, excluding the share of Hess, are distributed as follows: BP (operator of Azeri-Chirag-Guneshli) - 35.83 per cent, Chevron - 11,27 per cent, Inpex - 10,96 per cent, AzACG - 11 6 per cent, Statoil - 8,56 per cent, Exxon - 8 per cent, TPAO - 6.75 per cent and Itocu - 4,3 per cent.