State-owned Oil and Natural Gas Corporation Ltd (ONGC) on Friday (October 6) said its board of directors has granted its approval for a series of strategic measures aimed at strengthening the financial position of ONGC Petro additions Ltd (OPaL).

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The company has extended its backstopping support for compulsorily convertible debentures (CCDs) issued by OPaL, amounting to ₹5,615 crore, according to a stock exchange filing.

This extension, which will run for an additional six months starting from January 2, 2024, ensures the continuity of CCDs beyond their current maturity period.

In the event of a put option being exercised, these CCDs will ultimately be converted into equity shares held by ONGC or its nominee, it said.

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Further, ONGC will provide a letter of comfort (LoC) to OPaL for raising additional debt of up to ₹5,400 crore. This letter of comfort, subject to approval by ONGC's shareholders, serves as a commitment to investors of debt instruments, enhancing OPaL's capacity to raise funds at competitive rates.

OPaL is expected to utilise the letter of comfort within six months from the date of final approval, the company said.

OPaL is a joint venture, with ONGC holding 49.36% equity shares, while other equity stakeholders include GAIL (India) Ltd and Gujarat State Petroleum Corporation (GSPC) with equity shareholdings of 49.21% and 1.43%, respectively.

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Shares of Oil and Natural Gas Corporation Ltd ended at Rs 181.35, down by Rs 0.80, or 0.44%, on the BSE.

First Published:Oct 6, 2023 6:41 PM IST