New Delhi, April 9: State-owned Oil India Ltd has become the first Indian company to sell $1 billion worth of debt in its debut dollar bond sale programme.
Oil India plans to use the bond proceeds to refinance the bridge loan taken to acquire a stake in the Rovuma block in Mozambique.
“Oil India has made an inaugural $1-billion dual-tranche dollar unsecured bond issue in the international capital markets. The Regulation S Bonds were issued in two tranches of $500 million each for 5-year and 10-year tenors,” the company said.
This is the largest Regulation S bond sale by a non-banking state-run Indian company. Regulation S bonds can only be bought by investors outside the US.
The bond sale, which closed last night, drew bids worth $9 billion.
Oil India said the money raised would be used to repay the loan it had taken to buy Videocon’s 10 per cent stake in Mozambique’s Rovuma Area 1 oil block for $2.475 billion in association with ONGC Videsh late last year.
The 10 per cent stake is split into a 40:60 ratio between the two oil explorers.
“The transaction was very well executed in the backdrop of the Indian elections and a volatile global environment. We are pleased with the strong interest shown by top investors in Oil India’s debut bond issue,” chairman S.K. Srivastava said.