Issue of oil bonds to restore financial health of PSU OMCs

New Delhi, Feb 22 (UNI) The Union Cabinet today approved the issue of oil bonds worth Rs 5,750 crore to restore the financial health of the PSU oil marketing companies (OMCs).

The second tranche of Rs 5,750 crore would be on identical terms, and expected very shorty, Informationa and Broadcasting Minister Priya Ranjan Dasmunsi told reporters after the Cabinet meeting that gave the approval.

The first tranche financial package, that would come into effect immediately, include issuance of non-SLR tradable special securities amounting to Rs 5,750 crore having maturities-- 3 years (Rs 2,000 crore), 6 years (Rs 2.000 crore), and 9 years (Rs 1,750 crore).

These will carry fixed coupon to be determined on the basis of prevailing market rate of interest on Central government securities with comparable residual maturities on the date of issue of special securities, payable 6-monthly, with suitable spread for non-SLR status.

The package is also expected to mitigate the situation arising out of the continued mismatch between domestic retail process and international oil prices which have been on a reletnless rise since 2004, Mr Dasmunsi said.

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