ONGC Videsh secures $1.2 billion foreign loan to buy stake in Russia’s Vankor

ONGC Videsh Limited (OVL) has taken a bridge loan of $1.2 billion from a group of foreign banks, at a highly competitive rate of about 1.3 per cent, to fund its acquisition of a 15 per cent stake in Russia’s second biggest oilfield, Vankor. A group of banks – Citibank, DBS Bank, Mizuho Bank, Standard Chartered and Sumitomo Mitsui Banking Corporation – have given a nine-month loan to OVL at an interest rate of Libor plus 83 basis points (which works out to 1.3 per cent). In September 2015, the company had struck a deal to buy a 15 per cent stake in Vankor from Rosneft for $1.268 billion. According to sources, the current loan is likely to be drawn by June-end. The loan will be drawn over the course of nine months, to be replaced by a long-term financing. Vankor is OVL’s fourth biggest acquisition ever.