ONGC Videsh Ltd joins hands with foreign banks to raise $2.5 billion funds

NEW DELHI: ONGC Videsh Ltd (OVL), the overseas arm of state-run Oil and Natural Gas Corp (ONGC), has signed separate agreements with consortia of international banks for raising $2.5 billion offshore borrowings to fund the acquisition of a minority stake in an offshore gas field in Mozambique.

The first agreement is signed with a consortium of international banks, including ANZ, Bank of Nova Scotia, BTMU, DBS, Mizuho, RBS, Societe Generale, SBI and SMBC for $1.775 billion for a five-year term, the company said in a statement.

"The company had initially planned to raise $1 billion through this long-term facility. However, it decided later to upsize the same in view of overwhelming response from the banks," it said.

SMBC took the leadership role in this facility with commitment of $700 million and by acting as facility and escrow agent, it added. "This is the single largest offshore 5-year loan facility arranged by an Indian company during the last three years," it said.

The second facility is in the nature of a bridge finance of $725 million for a one year term with consortium of international banks such as ANZ, BNP Paribas, BTMU, Citi, DBS, RBS and SBI, it said. Citi took the leadership for this transaction.