London—listed Jubilant Energy plans to raise Rs 1,340 crore in rupee loans to repay existing term loan and fund its share of expense at the gas-discovery block in Krishna Godavari basin.
The company on October 18 wrote to the Oil Ministry seeking government consent for creation of a charge on its 10 per cent interest in gas discovery block KG—OSN—2001/3 for raising the loan.
The loan, it said, is to be raised from a consortium of public sector banks that include State Bank of India and Bank of India.
Jubilant Offshore Drilling Pvt Ltd (JODPL), a subsidiary of Jubilant Energy, holds 10 per cent interest in block KG—OSN—2001/3, which is operated by Gujarat State Petroleum Corp (GSPC).
“JODPL has approached different banks/financial institutions to raise rupee term loan of Rs 1,340 crore,” the company wrote. “The loan is to be used for repayment of existing term loan of Rs 650 crore and funding company’s share of expenditure on the development of Block KG—OSN—2001/3.”
The loan is to be secured by pledging or mortgaging the company’s stake in the block, where so far eight gas and one oil discovery have been made.
GSPC, which holds 80 per cent stake in the block, plans to begin gas production by April 2013.
Jubliant said State Bank of India is to provide Rs 250 crore loan while Indian Bank will lend Rs 200 crore.
Export—Import Bank of India (Exim) will give Rs 150 crore loan and Bank of India Rs 120 crore.
Other lenders in the consortium include Corporation Bank, Punjab National Bank, State Bank of Bikaner & Jaipur, State Bank of Patiala, United Bank of India (Rs 100 crore each), Allahabad Bank (Rs 70 crore) and Bank of Baroda (Rs 50 crore).
The loan “will be secured inter—alia by pari—passu mortgage, charge, pledge or other encumbrance, in favour of the lenders on the company’s participating interest in Block KG—OSN—2001/3 and all present and future receivables of the company from the block,” the firm wrote.
Also, the charge so created will be “subordinate to the rights of the Government under the Production Sharing Contract and the other consortium partners.”
The block was awarded to GSPC—led consortium under the third round of New Exploration Licensing Policy (NEL) in 2003.