The Hindu Business Line : IndianOil seeks nod to raise borrowing limit to Rs 80,000 cr

New Delhi, May 21 Indian Oil Corporation Ltd has sought shareholders approval for increasing its borrowing limits, both domestic and foreign, to Rs 80,000 crore for meeting its working capital requirement and capital expenditure programme.

Continued volatility in global crude prices leading to sustained increase in revenue loss due to selling petroleum products below the cost price has increased the company’s fund requirements substantially.

This has resulted in a significant increase in the company’s borrowings over a period of time. “Therefore, a need has arisen to increase the borrowing limits,” the company said in a notice to the BSE.

According to industry experts, this new limit is expected to be the largest for any public sector undertaking.

Currently, IOC can borrow up to Rs 20,000 crore from the domestic market through loans and credits, besides foreign currency loans of up to $4,500 million. IOC’s estimated borrowings as on March 31, 2008 are Rs 35,400 crore, including Rs 12,000 crore foreign currency borrowing. This is an increase of Rs 8,300 crore over the previous year’s borrowing of Rs 27,083 crore.

The company’s capital expenditure requirements for 2008-09 have been projected at Rs 10,500 crore against its total fund requirement of Rs 50,994 crore for the Eleventh Plan period.

The company on Wednesday informed the BSE about the notice of postal ballot dispatched to its shareholders seeking their nod for increasing the borrowing limit. The results of the ballot would be declared on June 30.

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