Cairn India completes $1.6 billion debt financing
14 October 2009
Cairn India has completed financing arrangements for $1.6 billion funding of its Rajasthan project. Cairn said the borrowings have a tenure of six years and the funds will be used to repay the existing debt of $850 million and for funding the ongoing projects in Rajasthan.
The financing has been arranged through a combination of US dollars and Indian rupee borrowing by accessing both domestic and international markets, Cairn said in a release.
The international borrowing of $750 million consists of a fully underwritten portion of $500 million by Standard Chartered Bank and $250 million loan by International Finance Corporation, a member of the World Bank Group.
The domestic borrowing has been underwritten by the State Bank of India (SBI) for Rs4,000 crore ($850 million). SBI Capital Markets Ltd acted as advisors to Cairn India for the domestic borrowing.
Cairn said its resource base has continually grown since the discovery of Mangala in 2004 and the focus in the coming years will be to realise the full potential of the Barmer Basin.
The Mangala, Bhagyam and Aishwariya fields together with their enhanced oil recovery (EOR) potential are being developed in sequence and when complete MBA production is expected to rise to at least 175,000 barrels of oil per day, Rahul Dhir, managing director and chief executive of Cairn India, said.
"We are delighted at the confidence shown by leading financial institutions, both in India as well as overseas, in our Rajasthan project and our business. The financing has been
completed by accessing two diverse markets on competitive terms in these current challenging times," said Dhir.