Bharat Petroleum Corporation (BPCL) and Oman Oil’s joint venture firm - Bharat Oman Refineries is likely to ink pact with banks for Rs 2,500-crore in order to bring down the cost of funds. The entity will refinance its existing loans at 60 to 70 basis points lower than its current cost of funds and the lenders have also agreed to refinance the loan at a lower rate.
The loan at lower interest rate will improve the company's profitability. Out of the total loan portfolio, about Rs 1,500 crore will go towards refinancing the existing loans and the remaining for other capital expenses. Bharat Oman will pay lenders a floating rate of interest, which will be 100 basis points over State Bank of India's base rate.
