|
| Aban seeks rejig of its Rs 13k-cr debt |
| Abhineet Kumar / Mumbai Sep 05, 2009, 00:40 IST |
|
Aban Offshore, the Chennai-based drilling firm, is in talks with State Bank of India and other public sector and private bank lenders for restructuring its Rs 13,000-crore loan. The loan was primarily to finance the acquisition of the Norwegian drilling company Sinvest ASA in 2006 for Rs 5,200 crore (at the then exchange rate of Rs 40 to a dollar).
In the last financial year, the company’s debt had been estimated at 12 times of its net worth. The company had reported net sales of Rs 3,050 core for 2008-09. Its profit for the period was Rs 540 crore.
Aban Offshore, which began as a comparatively small manufacturer of pipelines for oil refineries and fertiliser plants, grew to its present size through a series of expansion plans. Explorations at high costs became unviable when Brent, the benchmark crude oil price, crumbled from a high of over $145 per barrel in July 2008 to just $34 per barrel on December 24 due to the economic slowdown.
This downturn affected the demand for the rigs of the company. Aban Offshore saw as many as seven out of the total 20 rigs becoming idle, weakening its capability to repay the loan.
“The company is looking to enhance the payment period for nearly two-thirds of its debt,” said a banker familiar with the development. “It is seeking a 10-year payment period, instead of five to six years now,” he added.
However, oil prices have been gradually recovering. As of Wednesday, Brent was priced at $67.15 per barrel. The recovery in oil prices has helped the company deploy some of its idle assets.
Two weeks ago, the company announced the deployment of four of its seven idle jack up rigs — three in West Asia for three years and one in Latin America for over 25 months.
Revenue from the West Asian contract is expected to be Rs 2,925 crore and the contract for Latin America would fetch the company Rs 446 crore.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
