News: Cairn Energy inks deal with 14 banks

(BS 25/07/2006) New Delhi - Cairn Energy Plc has signed a $1-billion agreement with 14 international banks to fund its oil field development plan in Rajasthan on Tuesday.

It also plans to mop up $1-4 billion via an initial public offering (IPO) and participate in the NELP-VI.

"We may raise anything between $1 billion to $ 4 billion through the IPO. All the money raised through will go back to the shareholders in the UK," said Bill Gammell, chief executive officer.

Gammell further added, "Depending on market conditions, we will go ahead with the IPO in October-December or January-March next year."

Of the $1-billion, around $150 million has been raised from International Finance Corporation via a nine-year loan, while the remaining $850 million have been raised from 13 other banks, which include ABN-Amro, HSBC Bank Plc and the Standard Chartered Bank among others.

The company also believes that depending on the oil prices, it will be able to repay the loans within 18 months from 2008.