Hindustan Petroleum Corp Ltd said it had appointed banking intermediaries for organizing investor meetings in the run up to raising Rs 60 billion ($930 mln) by selling foreign-currency denominated bonds. The bonds will be non-convertible, and will be issued if the meetings discover favorable market conditions and demand, the state-owned oil marketing company said.
Shareholders of the company had, in January this year, approved the raising of funds from the domestic or overseas market by issuing debt.
The company did not specify what the money will be used for, but state oil marketing companies typically use such proceeds to fund their capital expenditure needs, such as putting up new refineries and plants. It was also reported yesterday that the company has joined the Indian consortium negotiating buying a 49 per cent stake in Russia’s Vankor Cluster oil fields in the Arctic region.
Even though the oil prices are down, oil companies in India do not have to worry as they get guaranteed margin on each liter of fuel sold. HPCL has about 25% market-share in India among public-sector companies. The Government of India owns 51.11% shares in HPCL and others are distributed amongst financial institutes, public and other investors.