India's fiscal deficit target getting more challenging: Fitch

A clock is seen inside the lobby of the headquarters of Fitch Ratings headquarters in New York, February 6, 2013.

Credit: Reuters/Brendan McDermid

MUMBAI | Mon Aug 26, 2013 3:56am EDT

MUMBAI (Reuters) - Fitch ratings said it was getting more challenging for India to meet its fiscal deficit target in the current fiscal year ending March 2014 with revenues slowing.

The rating agency is also monitoring India's growth, inflation, public finances and the current account deficit and its funding, analyst Art Woo said in a teleconference on Monday.

Fitch has a stable outlook on the 'BBB-' sovereign credit ratings. BBB- is the last rung on the ratings ladder above the so-called "junk" status that mainstream investors tend to avoid.

Last week, Fitch said India and Indonesia are not at immediate risk of credit rating downgrades, but warned it could act if the governments of these countries fail to calm current financial market tensions.

(Reporting by Suvashree Dey Choudhury and Neha Dasgupta; Editing by Prateek Chatterjee)

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

India's ONGC to buy $2.64-billion stake in Anadarko Mozambique gas block

A worker examines the valve of a pump on an Oil and Natural Gas Corp (ONGC) well on the western Indian city of Ahmedabad March 1, 2012.

Credit: Reuters/Amit Dave

MUMBAI/NEW YORK | Mon Aug 26, 2013 6:09am EDT

MUMBAI/NEW YORK (Reuters) - India's Oil and Natural Gas Corp (ONGC.NS) has agreed to buy 10 percent in a gas field offshore Mozambique from Anadarko Petroleum Corp for $2.64 billion, as the explorer looks to offset diminishing supplies from domestic gas fields by buying overseas assets.

The purchase of U.S. oil company Anadarko's (APC.N) stake is the latest in a handful of overseas assets that ONGC Videsh, the overseas business unit of state-controlled ONGC, has bought in the last couple of years to boost India's energy needs.

In June, ONGC and state-run Oil India Ltd (OILI.NS) signed a deal to buy a 10 percent stake in a Mozambique gas field from Videocon Group (VEDI.NS) for $2.48 billion.

"There is a lot of energy demand and whatever volumes of gas we are able to bring to the country are of utmost significance," A. K. Srinivasan, ONGC's group general manager for finance, told Reuters. "Mozambique will be a big LNG hub for the future."

Anadarko said it would remain the operator of Area 1, with a working interest of 26.5 percent in the block, which is located in Mozambique's deepwater Rovuma Basin.

Recent discoveries have turned the Rovuma field into a major draw for global energy producers and boosted Mozambique's natural gas reserves to around 150 trillion cubic feet or enough to supply Japan, the world's top LNG importer, for 35 years.

Rovuma has the potential to become one of the world's largest liquefied natural gas (LNG) producing hubs by 2018, and is strategically located to supply gas to India at competitive prices.

SEEN CLOSING BY MARCH 2014

ONGC, which expects the cash transaction to close by March 2014, is likely to finance the deal through internal cash balance and fresh borrowings, Srinivasan said, adding that financing details would be finalized over the next few months.

The company's bonds were trading at marginally wider spreads on Monday, underperforming tightness in the market, and shares fell as much as 3.8 percent in the Mumbai market .NSEI that was trading flat, on worries about its higher debt levels.

Analysts expect ONGC's two recent acquisitions to lead to higher debt levels, although a credit downgrade is unlikely.

"Given current market conditions and uncertainty about India, financing may be a challenge and we think most of it will come from the bank market. That said, a potential bond activity cannot be ruled out," a U.S. bank said in a note.

STARVING FOR GAS

ONGC, which has struggled to maintain output from its ageing wells off India's west coast, will be interested in buying more overseas assets to feed the energy needs of Asia's third-largest economy, Srinivasan said, but declined to give details.

"The country is starving for gas, for our power development and any other development," he said.

Demand for gas in India far outstrips consumption, but prices have been kept low for strategic industries, deterring investment in the sector. India has few energy resources other than coal and is the world's fourth-biggest importer of fuel.

After Anadarko, which has been looking to focus more on its domestic assets, Japan's Mitsui & Co Ltd is the second-biggest holder in Mozambique's offshore Area 1 block, with a stake of 20 percent.

Indian state refiner Bharat Petroleum Corp (BPCL.NS) owns 10 percent while Thai state oil company PTT Exploration and Production PCL PTTE.BK has an 8.5 percent interest and Mozambique's state-owned ENH 15 percent.

Outbound announced deals involving Indian companies so far this year stand at $35.8 billion, compared to $62 billion last year and a record $70.3 billion in 2008, Thomson Reuters data shows.

Bank of America Merrill Lynch (BAC.N) advised ONGC Videsh and Citigroup (C.N) advised Anadarko on the transaction.

(Reporting by Sumeet Chatterjee and Michael Erman; Additional reporting by Umesh Desai and Denny Thomas in HONG KONG; Editing by G Crosse and Clarence Fernandez)

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

India's fiscal deficit target getting more challenging: Fitch

A clock is seen inside the lobby of the headquarters of Fitch Ratings headquarters in New York, February 6, 2013.

Credit: Reuters/Brendan McDermid

MUMBAI | Mon Aug 26, 2013 3:56am EDT

MUMBAI (Reuters) - Fitch ratings said it was getting more challenging for India to meet its fiscal deficit target in the current fiscal year ending March 2014 with revenues slowing.

The rating agency is also monitoring India's growth, inflation, public finances and the current account deficit and its funding, analyst Art Woo said in a teleconference on Monday.

Fitch has a stable outlook on the 'BBB-' sovereign credit ratings. BBB- is the last rung on the ratings ladder above the so-called "junk" status that mainstream investors tend to avoid.

Last week, Fitch said India and Indonesia are not at immediate risk of credit rating downgrades, but warned it could act if the governments of these countries fail to calm current financial market tensions.

(Reporting by Suvashree Dey Choudhury and Neha Dasgupta; Editing by Prateek Chatterjee)

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

India's ONGC to buy $2.64-billion stake in Anadarko Mozambique gas block

A worker examines the valve of a pump on an Oil and Natural Gas Corp (ONGC) well on the western Indian city of Ahmedabad March 1, 2012.

Credit: Reuters/Amit Dave

MUMBAI/NEW YORK | Mon Aug 26, 2013 6:09am EDT

MUMBAI/NEW YORK (Reuters) - India's Oil and Natural Gas Corp (ONGC.NS) has agreed to buy 10 percent in a gas field offshore Mozambique from Anadarko Petroleum Corp for $2.64 billion, as the explorer looks to offset diminishing supplies from domestic gas fields by buying overseas assets.

The purchase of U.S. oil company Anadarko's (APC.N) stake is the latest in a handful of overseas assets that ONGC Videsh, the overseas business unit of state-controlled ONGC, has bought in the last couple of years to boost India's energy needs.

In June, ONGC and state-run Oil India Ltd (OILI.NS) signed a deal to buy a 10 percent stake in a Mozambique gas field from Videocon Group (VEDI.NS) for $2.48 billion.

"There is a lot of energy demand and whatever volumes of gas we are able to bring to the country are of utmost significance," A. K. Srinivasan, ONGC's group general manager for finance, told Reuters. "Mozambique will be a big LNG hub for the future."

Anadarko said it would remain the operator of Area 1, with a working interest of 26.5 percent in the block, which is located in Mozambique's deepwater Rovuma Basin.

Recent discoveries have turned the Rovuma field into a major draw for global energy producers and boosted Mozambique's natural gas reserves to around 150 trillion cubic feet or enough to supply Japan, the world's top LNG importer, for 35 years.

Rovuma has the potential to become one of the world's largest liquefied natural gas (LNG) producing hubs by 2018, and is strategically located to supply gas to India at competitive prices.

SEEN CLOSING BY MARCH 2014

ONGC, which expects the cash transaction to close by March 2014, is likely to finance the deal through internal cash balance and fresh borrowings, Srinivasan said, adding that financing details would be finalized over the next few months.

The company's bonds were trading at marginally wider spreads on Monday, underperforming tightness in the market, and shares fell as much as 3.8 percent in the Mumbai market .NSEI that was trading flat, on worries about its higher debt levels.

Analysts expect ONGC's two recent acquisitions to lead to higher debt levels, although a credit downgrade is unlikely.

"Given current market conditions and uncertainty about India, financing may be a challenge and we think most of it will come from the bank market. That said, a potential bond activity cannot be ruled out," a U.S. bank said in a note.

STARVING FOR GAS

ONGC, which has struggled to maintain output from its ageing wells off India's west coast, will be interested in buying more overseas assets to feed the energy needs of Asia's third-largest economy, Srinivasan said, but declined to give details.

"The country is starving for gas, for our power development and any other development," he said.

Demand for gas in India far outstrips consumption, but prices have been kept low for strategic industries, deterring investment in the sector. India has few energy resources other than coal and is the world's fourth-biggest importer of fuel.

After Anadarko, which has been looking to focus more on its domestic assets, Japan's Mitsui & Co Ltd is the second-biggest holder in Mozambique's offshore Area 1 block, with a stake of 20 percent.

Indian state refiner Bharat Petroleum Corp (BPCL.NS) owns 10 percent while Thai state oil company PTT Exploration and Production PCL PTTE.BK has an 8.5 percent interest and Mozambique's state-owned ENH 15 percent.

Outbound announced deals involving Indian companies so far this year stand at $35.8 billion, compared to $62 billion last year and a record $70.3 billion in 2008, Thomson Reuters data shows.

Bank of America Merrill Lynch (BAC.N) advised ONGC Videsh and Citigroup (C.N) advised Anadarko on the transaction.

(Reporting by Sumeet Chatterjee and Michael Erman; Additional reporting by Umesh Desai and Denny Thomas in HONG KONG; Editing by G Crosse and Clarence Fernandez)

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

India's Lanco Infra starts process to restructure $1.3 billion debt

By Neha Dasgupta

MUMBAI (Reuters) - India's Lanco Infratech Ltd has started a process to restructure debts totaling 75 billion rupees ($1.3 billion) after economic weakness impacted the performance of some of its businesses such as power and engineering and construction.

If the process is approved by its lenders, Lanco would be the second debt-laden company to go for a major loan restructuring within nine months, after lenders to wind turbine maker Suzlon Energy in November agreed to restructure about 110 billion rupees of its debt.

Lanco, which produces power, builds roads and constructs residential and commercial buildings, has asked banks to restructure the debt, a company statement said on Saturday.

The Business Standard newspaper earlier said Lanco had started discussion with its bankers to restructure debt worth 90 billion rupees.

The company, which acquired Australia's Griffin Coal Mining Co for about $760 million in 2011, said the debt restructuring would involve Lanco Infratech as a standalone unit and would not impact any of its units including the Australian business.

Banks bring cases to the so-called corporate debt restructuring process to negotiate relaxed repayment terms with struggling borrowers.

Many lenders have expressed worry about loans to the power, commercial real estate, construction, aviation, textile and metals sectors, which are among those hardest-hit by slowing growth and sluggish policymaking that has deterred investment.

"The current adverse macro-economic situation that has been prevailing in India since last 12 months has affected the performance of LITL's EPC business as well as the subsidiary business," the company said referring to the engineering, procurement and construction business.

"We expect this situation to remain for another 18 to 24 months time," it said, adding the restructuring process will help Lanco to complete its ongoing projects on time.

Lanco, which had total debt of 336 billion rupees as of the end of March, posted losses in the last two financial years, as the weak Indian economy, growing at its slowest in a decade, hit infrastructure investment.

Project bottlenecks, largely because of problems in acquiring land, and high funding costs, have also sapped investment in the infrastructure industry in Asia's third-largest economy.

(Writing by Sumeet Chatterjee; Editing by Robert Birsel and David Holmes)

View the original article here