IOC mops up $250m through ECB route
New Delhi   26-Nov-2011

Country’s largest oil marketing company IndianOil (IOC) raised $250 million in foreign debt last week to fund its Paradip refinery in Orissa and to fund normal capex and other projects.

“We have raised $250 million to fund the Paradip project. The bullet term loan has tenure of five years. We raised the money last week,” PK Goyal, director of finance at IOC, told Financial Chr onicle.

Three banks, namely State Bank of India, Tokyo’s Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation were the underwriters. “It is balance sheet funding and not project funding,” said an official involved in the issue.

However, the official ref u sed to give the details ab out interest rate.

IOC is setting up a 15 million tonne per annum (mt pa) greenfield refinery and petrochemical complex at Paradip in Orissa. The pro ject, estimated to cost ar ound Rs 29,777 crore, is slated for commissioning in Ap ril-June 2013. It will partially meet the deficit in distillates such as LPG, naphtha, diesel and other products, in the eastern part of the country.

Apart from a crude and vacuum distillation unit, the refinery will have a hydrocracking unit, a delayed coker unit and other secondary processing facilities. This will be the most modern refinery in India with a nil-residue production, said IOC. IndianOil has taken over 3344 acres of land for the project.

In a bullet term-loan, the borrower is expected to repay the entire principal amount and sometimes even the interest in one go at the end of loan period. The payment made at the end of expiry of loan tenure is known as balloon payment.