IndianOil to raise $300m, HPCL $200m via ECB route
New Delhi   19-Sep-2012

PSIJ oil refining giant IndianOil plans to raise $300 million (Singapore dollars) in foreign debt while another state-owned refiner Hindustan Petroleum Corporation (HPCL) plans to raise $200 million.

PK Coyal, Director (finance), IndianOil, told FC,"We will be raising $300 million through external commercial borrowings. We have appointed Standard Chartered Bank and DBS (of Singapore) last week. The tenure will be 10 years. The funds will be used to fund Paradip refinery (in Orissa)."

On the same lines, HPCL is looking at raising $200 million through ECBs. The loan tenure is five years with a bullet repayment.

Bhaskar Mukherjee, director finance, HPCL said, "We have different projects and will be using the loan to fund these projects."

According to a banker close to the development, "HPCL has already floated the request for proposal. The loan is $200 million with a five-year bullet repayment." Bank of Tokyo-Mitsubishi and Sumitomo Mitsui Banking are some of the arrangers. 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.

According to data from RBI, Indian firms have raised $17.91 billion under the automatic route from January-July2012.