“The company has held talks with a couple of global banks to assess their interest for a possible dollar bond,” said one of the persons, who did not wish to be identified.
However, the company has not yet finalised whether to proceed with the fundraising, said the person. Part of the fund will be used for expansion and the remaining for refinancing the existing debt.
An Essar spokesperson said, “We continually assess various opportunities to fuel our growth strategy. As a matter of policy, we don’t comment on specific discussions or plans until they’re finalised.”
EOGEPL is entirely owned by Essar Exploration & Production Ltd, Mauritius. This parent company also owns other assets such as oil and gas operations in Nigeria and a gas block in Vietnam. These other assets are still in the early stages of exploration and are not generating income yet. Other Essar businesses, such as power, ports and steel, have also faced financial restructuring
The company underwent restructuring and under the plan resolved loans availed by the company for the development of its Raniganj Coal Bed Methane (CBM) Block in West Bengal. The loans included $82 million in foreign currency debt and Rs 1,000 crore in local currency loans from lenders such as Axis Bank, Yes Bank, Indian Overseas Bank, Axis Bank Gift City Branch and Indian Infrastructure Finance Ltd. UK.EOGEPL is financially stable for now, but it 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. The company also entered a 15-year CBM sale and purchase agreement with GAIL India Ltd. for up to 2.3 million metric standard cubic metres per day of gas. It is conducting early-stage exploration and is also exploring shale gas in the Raniganj CBM block in West Bengal.
