Essar Oil & Gas plans to sell $275 million overseas bonds after restructuring

Essar Oil and Gas Exploration and Production Ltd. (EOGEPL) has entered into initial talks to raise $275 million through overseas bonds, marking its first fundraising initiative since undergoing debt restructuring, according to people familiar with the matter.

“The company has held talks with several global banks to assess their interest for a possible dollar bond,” said one of the people, who asked not to be identified.

However, the company is yet to decide whether to go ahead with fundraising, the person said. A part of the fund will be used for expansion and the rest for refinancing existing debt.

An Essar spokesperson said, “We are continuously evaluating various opportunities to fuel our growth strategy. As a matter of policy, we do not comment on specific discussions or plans until they are finalized.

EOGEPL is wholly owned by Essar Exploration and Production Limited, Mauritius. The parent company also owns other assets such as oil and gas operations in Nigeria and gas blocks in Vietnam. These other assets are still in the early stages of exploration and are not yet generating revenue. Other Essar businesses, such as power, ports and steel, have also faced financial restructuring

The company was restructured and the loan taken by the company for the development of its Raniganj Coal Bed Methane (CBM) block in West Bengal was resolved under the scheme. Loans include Axis Bank, Yes Bank, Indian Overseas Bank, Axis Bank Gift City Branch and Indian Infrastructure Finance Ltd. UK 82 million in foreign currency borrowings from lenders such as Rs. 1,000 crore included.

EOGEPL is currently financially stable, but operates under strict conditions set by its lenders. The Raniganj CBM block, awarded to Essar in 2002, has since seen the development of 348 CBM production wells and supporting pipelines. Company GAIL India Ltd. Also signed a 15-year CBM sale and purchase agreement for 2.3 million metric standard cubic meters of gas per day. It is conducting early stage exploration and is also exploring for shale gas in the Raniganj CBM block in West Bengal.