OVL plans to raise $500-700 mn to fund Mozambique acquisition

ONGC Videsh Ltd. plans to raise $ 500-700 million loan by pledging future crude oil production from its overseas assets, to fund the acquisition of a Mozambique gas field.

OVL, the overseas arm of the state explorer Oil and Natural Gas Corp (ONGC), teamed up with Oil India Ltd. (OIL) to buy Videocon's 10% stake in Mozambique's Rovuma Area 1 for $ 2.475 billion.

Subsequently, OVL on its own bought another 10% stake in the same field from Anadarko Petroleum Corp of the US for $ 2.64 billion. The 10% stake of Videocon is currently split in 60:40 ratio and total payout for OVL for the back-to-back acquisitions is $ 4.125 billion.

BS