IndianOil's borrowings increase to Rs 29,908 crore
New Delhi   07-Feb-2008
The borrowings of the IndianOil have zoomed to Rs 29,908 crore (provisional) as on December 31,2007 from Rs 27,963 crore as on September 30,2007 and are at higher levels consistently on sustained under-recoveries. The foreign currency borrowing level has also increased from $2885 million in September $2961 million in December and is currently at around $2908 million. IndianOil board has projected that in view of huge capital expenditure requirement and continuing high oil prices, the borrowings are expected to remain at around these levels. Informed sources told FE that the exact quantum of bonds to be liquidated/pledged and the timing for liquidation would be worked out in consultation with the merchant bankers and considering market conditions. However, the IndianOil board at its recent meeting observed that in view of the huge borrowings and liquidity constraints it may be prudent to liquidate Special Bonds, 2025 for an amount of Rs 6362 crore in the secondary market to meet shorter in funds requirement of the IndianOil. IndianOil board has already approved investment in 7.95% Oil marketing Companies' Government of India Special Bonds, 2025 for an amount of Rs 6362 crore. IndianOil can sell these bonds or pledge them as collateral securities for raising funds in favour of banks / financial institutions / Clearing Corporation of India Ltd. (COL). It must be mentioned here that the centre on January 18 had decided to issue Oil Marketing Companies’ Government of India Special Bonds, 2025 (OMC Special Bonds) to OMCs for a total amount of Rs 11,256.92 crore to compensate for estimated under-recoveries on account of sale of sensitive products during the current financial year. According to sources, the GOI bonds would be transferable so that they can be traded in the secondary market. Moreover, the interest would be reckoned from the date of commencement of tenure.