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National

October 7, 2010

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PPL mulls global bonds to explore more

KARACHI: Pakistan Petroleum Limited (PPL) is planning to raise money through global markets by issuing dollars bonds to intensify its exploration activities, a brokerage report quoting company sources said on Wednesday.
“The size of the issue could be between $200 and $400 million,” said the report of Topline Securities.
The money would be used to explore 13 blocks the company acquired recently and funds for this purpose could also be raised through domestic sources, the report added.
“Once cash rich, it is very interesting to see that a local exploration and production firm is aggressively pursuing growth plans amid political and economic uncertainty,” it said.
The bond issue can attract a lot of investors at a time when bond yields, offered by developed countries, remain close to zero, it said.
PPL was quite aggressive in acquiring exploration blocks during the last auction conducted by the petroleum ministry. Out of the 14 concessions it won, only one is partner-operated.
One of the reasons to raise funds is the overdue receivables of $200 million or Rs17 billion, which PPL has seen stuck up in the inter-corporate circular debt, Topline said.
“The company expects that the overdue receivables could grow further and may potentially dry out liquidity for meeting drilling targets in future.”
Meanwhile, PPL spokesman said that the company was considering different options to mobilise funds. “I can neither confirm nor deny that we plan to issue bonds,” he said.

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