Mumbai: State-owned Bharat Petroleum Corporation Limited (BPCL) has received board approval to raise up to Rs 5,000 crore by issuing non-convertible debentures (NCDs).
The company announced the decision in an exchange filing on Tuesday, August 18. The proposal was approved by its board of directors at a meeting held during the day.
Fundraising Plan
BPCL said the debentures may be secured or unsecured. Secured debentures are backed by company assets, while unsecured debentures do not carry such security.
The NCDs will also be redeemable, meaning BPCL will repay the borrowed amount to investors after the agreed period.
The total fundraising will not exceed Rs 5,000 crore. However, the company does not have to raise the entire amount in a single issue.
BPCL may issue the debentures in one or more series or tranches. The board has allowed the company to divide the fundraising into a maximum of 10 tranches.
The approved amount can be raised within one year, giving the company flexibility to enter the debt market at suitable times and decide the size of each issue.
Details Awaited
BPCL has not yet disclosed the interest rate, maturity period, issue dates or the amount to be raised in each tranche.
The company said the allotment terms and other information will be decided at the time of issuing each series or tranche. These details will be shared with the stock exchanges in the required format.
The final structure may depend on BPCL’s funding needs and conditions in the debt market at the time of each issue.
Non-convertible debentures are debt instruments used by companies to borrow money from investors. Unlike convertible debentures, they cannot later be changed into equity shares.
Board Meeting
The BPCL board meeting began at 11 am and ended at 3.45 pm on August 18.
The disclosure was made under Regulations 30 and 51 of the Securities and Exchange Board of India’s listing rules. BPCL had earlier informed the exchanges about the board meeting on August 13.
