ONGC ties up 18k cr loan from 3 banks for buying HPCL

The company is likely to sign-up more loan agreements to pay for acquiring government's 51.11 percent stake in HPCL for Rs 36,915 crore.

ONGC is to pay the government for the stake within this month.

The acquisition would create India's first integrated oil company. This would be ONGC's biggest acquisition and second buyout this fiscal after its Rs 7,738 crore acquisition of 80 percent stake in Gujarat State Petroleum Corp's KG basin gas block.

ONGC Chairman and Managing Director Shashi Shanker had on Sunday stated that the company's board has approved raising of the borrowing limit from Rs 25,000 crore to Rs 35,000 crore.

This will be the company's first ever debt.

"We will use our (Rs 12,000-13,000 crore) cash first and then the liquid assets and debt will be last," he had said. "This order can change, because we won't sell the liquid assets in distress. Also, we have offers for over Rs 50,000 crore debt at very competitive rates, both foreign currency and local."

ONGC holds 13.77 percent stake in Indian Oil Corp (IOC), which is worth over Rs 26,000 crore. It also holds 4.86 percent stake in GAIL India Ltd, which is worth over Rs 3,800 crore.

The company had on January 20 announced buying of government's 51.11 percent stake in India's third largest state-owned oil refiner and marketing company for Rs 473.97 per share in an all-cash deal that is to be closed before the month-end.