ONGC Videsh had raised Rs 525 million through a seven-year bond in July 2014 to partly finance its acquisition of a stake worth $4.12 billion in the Mozambique block. These bonds, bearing a fixed coupon of 2.750% per annum and guaranteed by parent ONGC, are due in July. The company holds a 16% stake in Mozambique’s offshore Rovuma Area 1.
The ONGC unit will have to tap the debt market again for repayment of about three-fourths of the Rs 525 million due, while the balance can be repaid using internal cashflows, a person with knowledge of the matter said. The company will once again go for foreign currency bonds, the person said.
ONGC Videsh raised about $700 million in debt in November to repay loans of $775 million. Just about 10% of this loan was repaid using internal resources.
Production at the Mozambique gas field has been delayed by several years and with the expected cashflows yet to begin, the company has to refinance previous rounds of debt. The field is expected to start production in 2024.
