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GAIL to invest Rs25,000 cr in next 5 yrs

GAIL to invest Rs25,000 cr in next 5 yrs
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First Published: Wed, May 09 2007. 04 35 PM IST
Updated: Wed, May 09 2007. 04 35 PM IST
By PTI
New Delhi: State-run GAIL (India) Ltd plans to invest about Rs25,000 crore in laying new pipelines and expanding petrochemical business during the next five years, a part of which may be raised through sale of its stake in ONGC.
“Out of the total capex, Rs10,000 crore will be funded from internal resources and the remaining Rs 15,000 crore will be borrowed from domestic and overseas market,” GAIL director (finance) R.K.Goel told a news conference here.
The company holds 2.4% stake in Oil and Natural Gas Corp, which is worth Rs4,672 crore at today’s share price of Rs909.
“We may look at selling part of our holding in ONGC to meet the capex requirements,” Goel said.
GAIL’s current debt-equity ratio of 0.12:1 will help leverage debt for the expansion projects. “We are getting ourself rated. Moody’s Hong Kong is rating us and once that comes, foreign debt will be easier,” he said.
The company will invest Rs2,744 crore during current fiscal - Rs1,761 crore in laying new gas pipelines, Rs146 crore in petrochemicals, Rs500 crore in oil and gas exploration and Rs268 crore in new projects.
“Next year, the capex will be around Rs6,000 crore and we may borrow Rs2,500 crore toward the end of the current fiscal to meet part of that requirement,” he said.
The state-run gas transporter may raise as much as 60% of the planned borrowings overseas while the remaining would be domestic debt.
Company chairman U.D.Choubey said GAIL recorded a 11% jump in turnover in 2006-07 to Rs16,407 crore. Net profit was Rs2,387 crore against Rs2,310 crore a year ago.
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First Published: Wed, May 09 2007. 04 35 PM IST
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