Financial Daily from THE HINDU group of publications
Wednesday, Oct 02, 2002
Financial Daily from THE HINDU group of publications Wednesday, Oct 02, 2002 |
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Corporate
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Corporate Bonds IOC in talks with banks to monetise bonds Our Bureau
Mr M.S. Ramachandran (right), Chairman, Indian Oil Corporation Ltd, with Mr A.M. Uplenchwar, Director (Pipelines, planning and business and development), at the company's annual general meeting in the Capital on Tuesday.
NEW DELHI, Oct. 1 INDIAN Oil Corporation (IOC) is closing on a deal to monetise oil bonds worth Rs 5,276 crore, according to the IOC Chairman and Managing Director, Mr M.S. Ramachandran. IOC hopes to realise Rs 5,000 crore from the bonds and this receipt would be used to repay a part of its Rs 17,800-crore debt. Addressing a press conference here on Tuesday, Mr Ramachandran said: ``Discussions are on with a number of banks to monetise the bonds. The deal is likely to come through this month.'' In April this year, the Centre had issued `6.96 per cent Oil Companies' Government of India Special Bonds, 2009' on a provisional basis in lieu of 80 per cent of the estimated outstanding claims of the oil companies in the erstwhile Oil Pool Account under the Administered Pricing Mechanism as on March 31, 2002. The claims reflected the under-recovery of costs by oil marketing companies in the sale of products like petrol, diesel, kerosene and LPG whose retail prices were administered by the Government. IOC was issued 7-year market tradable bonds worth Rs 5,276 crore while Hindustan Petroleum Corporation was issued Rs 1,481 crore worth of oil bonds and Bharat Petroleum Corporation got bonds worth Rs 1,018 crore. The remaining deficit in the oil pool account, which ceased to exist from April 1 as part of the deregulation of the oil sector, would be liquidated after an audit by the CAG. On the equity divestment front, Mr Ramachandran said that IOC hoped to mop up around Rs 2,600 crore from sale of half of its equity holding in ONGC and GAIL. ``We plan to offload half of our 9.61 per cent stake in ONGC and 4.8 per cent in GAIL in the stock market shortly. The Government is closely looking at our proposal,'' he said. "The modus operandi of the sale is yet to be worked out. We want to see how markets react before we appoint a merchant banker for the sale. Further, the stake sale would be in phases," Mr Ramachandran said. "The decision would boost ourbottomline and go a long way in sustaining profitability and bringing down the debt-equity ratio,'' he added.
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