The Hindu Business Line : Preparation for overseas borrowings

OIL and Natural Gas Corporation (ONGC) has roped in Moody's to provide an `issuer' rating for the company. This, according to ONGC sources, is to prepare the organisation for any future borrowings.

Company sources, however, ruled out any immediate plans to raise funds, but said the company may require foreign debt to fund its overseas acquisitions.

The company has signed Moody's for providing the rating ahead of a possible external commercial borrowing to fund its overseas arm ONGC Videsh Ltd's (OVL) requirements, the sources added. Funding of large acquisitions by OVL may not be possible out of internal accruals, they said.

Moody's has also rated companies such as Reliance. OVL, which is looking at acquisition of several medium-sized oil and gas firms in Central Asia, Africa and Eastern Europe, may need more than a billion dollars for each acquisition. In fact, ONGC had recently sought shareholderapproval to raise the borrowing limit to Rs 65,000 crore.

About the options available to OVL to raise funds abroad, the sources said OVL could either directly borrow or ONGC could raise funds from the market through fresh equity or through fresh borrowings and lend it to OVL.

ONGC has also asked CRISIL and ICRA for domestic rating to tap non-government provident funds, superannuation and gratuity funds.

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