ONGC logo.
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Bengaluru: ONGC Videsh, the overseas investment unit of the country's top explorer, Oil and Natural Gas Corp, has received a five-year over Rs 34 thousand crore loan from DBS Bank and Bank of Baroda , a company spokesperson said on Thursday.
The loan will strengthen ONGC Videsh's available cash as it contends with shrinking free cash.
Merchant bankers said last month that the company was likely to issue bonds to raise funds, and Venezuela provided some respite in January by agreeing to give ONGC Videsh some oil in lieu of over Rs 49 thousand crore dividend dues.
ONGC Videsh's free cash flow was down about 88 per cent from a year earlier to Rs 648 crore ($78 million) in the financial year ended March 2023, as per LSEG data.
The new loan is a refinancing of over Rs 41 thousand crore loan it had received in 2019 for a project in Mozambique, the spokesperson told Reuters.
DBS Bank, a unit of Singapore's DBS Group Holdings , is leading the syndicated transaction guaranteed by ONGC, spokespersons for both ONGC Videsh and DBS Bank told Reuters.
A syndicated loan involves two or more lenders providing funds for a single loan to a borrower. DBS Bank is committing nearly Rs 25 thousand crore for loan while the Indian state-owned Bank of Baroda is providing nearly Rs 1000 crore, the spokespersons said.
($1 = 83.1310 Indian rupees)