India's ONGC seeks shareholders' nod to raise 250b rupees

[MUMBAI] India's state-owned Oil and Natural Gas Corp said on Monday it wanted to raise 250 billion rupees (S$5.29 billion) through debt to fund acquisitions and capital expenditure this financial year.

ONGC's first debt issue in more than a decade would likely buy the government's 51.1-per cent stake in refining and marketing company Hindustan Petroleum Corp Ltd, company officials and analysts said.

New Delhi - which has about a dozen state-owned oil and gas companies with significant overlaps in operations - is trying to create a large integrated energy firm.

ONGC, already the country's biggest explorer, would become India's first group with operations spread across exploration, production, refining and marketing of petroleum and its products after the acquisition.

ONGC said it would seek shareholder approval for the debt issue at its annual general meeting on Sept 27.

It had not decided on the mechanism, saying it could be issued in Indian rupees or foreign currency through bonds or non-convertible debentures in domestic or overseas markets.

ONGC is on a major capital expenditure programme and plans to spend close to US$5 billion over the next few years to develop its natural gas fields in the east coast.

REUTERS