GAIL plans Rs1,000 cr bond issue to part-fund expansion into LNG shipping

GAIL (India) Ltd, India's biggest natural gas distributor, is planning to raise fresh capital to fund its expansion into areas like liquefied natural gas (LNG) shipping business post 2017. The company is looking to raise Rs1,000 crore through a domestic bond issue to part-fund its capital expenditure in the current financial year.

BC Tripathi, chairman and managing director of the state-owned gas utility, said the company is looking to have around seven-eight LNG carriers within the next three-four years on a long-term charter or ownership basis.

The gas marketing and transmission firm will invest Rs7,500 crore in current fiscal, mostly in pipeline expansion, Tripathi said.

GAIL had invested around Rs6,500 crore in the previous financial year.

GAIL (India) Ltd plans to invite expressions of interest (EoI) in July.

"Of the planned capex for current year, about Rs3,500 crore will come from internal resources or accruals. For the rest, we plan to borrow Rs1,000 crore in next quarter from rupee bond issue and another Rs1,500 crore through external commercial borrowings (ECB)," he said.

GAIL director (finance) P K Jain said Rs710 crore loan has already been tied-up from Oil Industry Development Board (OIDB) and another Rs140 crore remains to be drawn from loan approved last year.

OIDB will this year lend Rs850 crore to GAIL, he said, adding Rs575 crore will be borrowed from HDFC.