International Development News
Development News Edition

BIZ-OIL-FITCH


Oil India's (OIL) proposed share

buyback is likely to weaken its financial profile as its net

leverage may rise to about 2.5 times by the end of fiscal

2020, according to Fitch Ratings.

This rate is higher than the rating agency's previous

expectation of 2.2x (times), shrinking the already-low

headroom for OIL's 'BBB-' standalone credit profile as Fitch's

current negative rating norms for net leverage is 2.5 times.

On November 21, OIL announced its plans to buy back

4.45 per cent of its shares at a total cost of Rs 1,090 crore.

"This, in our view, will drive up OIL's net debt

levels in addition to its need to fund its negative free cash

flows due to its plans for higher capex of about USD 600

million per year and dividends," the agency said.

Fitch noted that it expects both domestic and overseas

capex to rise over the next two to three years.

OIL aims to augment its domestic production and

reserves and will also be required to contribute towards its

share of the Mozambique liquefied natural gas development

after the final investment decision is made, likely in

mid-2019.

"We are not yet considering any benefit to OIL's

financial or business profile from the higher capex over the

next two to three years due to the uncertainty around its oil

and gas exploration efforts and risks associated with the

Mozambique asset," it said.

However, Fitch may consider a one-notch uplift to

OIL's final rating if its standalone credit profile falls to

'BB+', it said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION/BLOG/INTERVIEW

How music can help expectant mothers during pregnancy

Music provides pleasant ambience for all but its more important for expectant mothers as besides ensuring pleasant environment for them it also directly and indirectly influences the unborn babies. There are various scientific findings to c...

EdTech: A technical approach to flexible and cost-effective education

Its hight time for the world to go for innovative approaches like e-learning over traditional learning methods that need physical infrastructure, long-term planning, and huge investment. ...

Our school campaigns are our strongest ally: Joaquin Antuna, founder of Peace and Cooperation

Joaquin Antuna is the founder of Peace and Cooperation, a Spanish NGO which was nominated as peace messenger by the United Nations in 1986. Antuna is of very firm opinion that in order to have an incisive impact on the community we live in,...

'No escape from telephones', this 1953 prediction actually comes true

In 1953, a telephone company chief predicted that therell be no escape from telephones in the future....

Videos

Latest News

UPDATE 1-Colombians march as government warns against violence

Colombian unions, student groups and other protesters were marching on Thursday to insist the government maintain the minimum wage for young people and the universal right to a pension, even though the government says those are not part of ...

UPDATE 2-Turkey needs to 'get rid of' Russian S-400 system to overcome impasse with US - US official

Turkey needs to get rid of the Russian S-400 missile defense system it purchased, a senior State Department official said on Thursday, to overcome a standoff with Washington, which says the procurement poses a threat to NATO defense capabil...

Unhappy fans cannot sue over Mayweather-Pacquiao fight -U.S. court

A U.S. appeals court on Thursday said boxing fans who felt cheated after learning that Manny Pacquiao had been injured before fighting Floyd Mayweather Jr. cannot pursue class-action litigation because the 2015 welterweight bout dubbed the ...

Britain repatriates some orphans left in Syria

Foreign Secretary Dominic Raab said on Thursday Britain had arranged for some orphans to be brought home from Syria because it was the right thing to do. Britain has been reluctant to allow adults who joined Islamic State in Syria to return...

Give Feedback