OVL eyes domestic market for Imperial acquisition

New Delhi: The lean global credit scenario may compel ONGC Videsh (OVL), the overseas investment arm of ONGC, to look at the domestic market to partly fund its £1.4-billion (about $ 2.07 billion) acquisition of LSE-listed Imperial Energy Corporation Plc.

OVL plans to raise bridge loan amounting to $1 billion to part-fund its proposed acquisition. $1.1 billion will be lent by the parent ONGC. OVL is acquiring Imperial through its Cyprus-registered wholly-owned subsidiary Jarpeno Ltd.

The company officials, however, maintained that “both domestic and overseas options are available to the company. A lot will depend on the pricing, cost and terms being offered.”

Separately, the ONGC, Chairman and Managing Director, Mr R.S. Sharma, while terming the decision to go ahead with acquisition of Imperial Energy as “positive”, said there was no change in the plans to raise a bridge loan of $1 billion to part-fund the purchase.

“We have enough resources and ONGC has the credibility to raise money. So, funding will not be a problem,” he added.

Speaking to newspersons a day after successfully making an open offer to the shareholders of LSE-listed Imperial Energy, he expressed confidence that the move will get very good returns on investments in the long term. Mr Sharma was speaking at the sidelines of the National Convention of UN Global Compact.