Indian Oil Corporation (IOC), the sole importer of crude for public sector oil refineries, has received clearance from the Reserve Bank of India (RBI) to market extra crude in the international market. IOC would be able to sell extra crude having a foreign exchange cap of $ 2 million.
Speaking to the press here today, P Sugavanam, director (finance & human resources) said, "IOC has obtained permission from the RBI to sell or offload part of its extra crude in the international market. The permission was received almost a month back."
IOC has decided to sell crude after meeting its refinery requirement. "Thus far we have not sold extra crude in the market. We have just received permission and we will find opportune time to sell extra crude." IOC is expected to reduce inventory, reduce demurrage charges and et al. "By offloading one cargo in the international spot market, we expect to soften the crude market", Sugavanam said. IOC imports over 70 per cent of crude and petroleum product requirement for the country.
Meanwhile, the oil major recently raised a Rs 435 crore syndicated rupee term loan priced on a floating rate basis.
The loan will be re-priced every three months. Standard Chartered Bank was the lead arranger-cum-book runner and Union Bank of India was the joint arranger. The other participating banks included Dena Bank, HDFC Bank, Karur Vysya Bank, The Lakshmi Vilas Bank and BNP Paribas. IOC is not looking to raise any syndicated term loans over the next couple of months.
"At present, we are not looking at any off-shore syndication as it is not economical. We are looking at a local syndication of 5-7 years maturity, whichever is economical, after March 2002," said Sugavanam.
Some banks had breached their exposure limits on IOC. "In cases where the banks have faced difficulty in exposure limits we have approached the RBI. The apex bank normally considers such request. The waiver of the exposure norms can be looked in as IOC is many companies rolled into one," said Sugavanam.
