Great Offshore, which saw an effective change of management control last week, stands to lose Rs 73 lakh daily revenue after missing the deadline to provide a shallow water rig to the Oil and Natural Gas Corporation (ONGC).

ONGC today decided to revoke the rig’s bank guarantee, as the supplier — Bharati Shipyard — has said it will be able to provide the rig only in November, five months after the original deadline. ONGC’s move is being seen as a first step towards cancelling the five-year contract.

“This is as per the terms of contract,” an ONGC spokesperson said. Industry insiders said the oil producer had entered into the contract when the demand for rigs was at its peak. Now that the demand has mellowed, ONGC has seized the opportunity to cancel the contract as it can get rigs at a much cheaper rate in the current market.

A Great Offshore spokesperson confirmed the development. Bharati Shipyard officials could not be reached.

Last week, Bharati, the second largest private ship builder, announced it had purchased a 14.9 per cent stake in the company from its original promoter, Vijay Sheth. This happened after Sheth failed to repay the loan he took against pledging his stake with Bharati Shipyard. Sheth is now left with less than one per cent stake in the company.

“It is a temporary setback for both Bharati and Great Offshore as their fortunes are now tied together,” said Jehangir Adi Master, an analyst tracking the industry at Mumbai-based brokerage, Pranav Securities.

Great Offshore will now have to find a new client for the rig after it is completed, but it is unlikely to get the high daily rate at which it had contracted with ONGC after a public auction.

On Thursday, the Great Offshore stock was up by 1.91 per cent to Rs 278 a share on the Bombay Stock Exchange (BSE). The Bharati Shipyard stock closed 10.16 per cent up, to Rs114.95 a share, on a day when the Sensex fell 146 points.

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Wall Street opens flat as data offsets Moody's warning - Thomas Cook India Q4 net jumps three times - Govt plans to make 30% sourcing from MSEs mandatory - Explain ways to cover govt loss on 3G roaming: TDSAT to telcos - Magma Fincorp plans to start gold finance biz in H1 of FY13

Tags : ONGC | rig deal | Great Offshore |   Read Business news in  Advertisements -  Now property search gets more exciting than ever before! -  High Growth Business Opportunities in Africa - Register to explore -  Medium-sized businesses are the engines of a smarter planet. -  Save over Rs.3000 with IndianOil Citibank Card -  We live for our family. have you secured them? -  India's No. 1 Property Site. Click here to know more.. -  Diseases earlier, Saving Costs, Extending Lives. Know More.. -  Get 5% cashback on telephone bills with Citi -  Enjoy the journey as much as the destination. click to know more.. -  Exim Bank Conclave on India - Africa Project Partnership. Know more.. -  Be part of it The World's Largest Aircraft. -  Creating Wealth made simple the SIP way. Know more.. -  Only Developer to give a guarantee on time space & rate. -  Office 365 for professionals and small businesses. -  Buy Your Property with Our Triple Guarantee in India. -  Improve Patient Care & Experience. Click here to know more -  Win a Business Class Ticket to Europe..Know more.. -   Introduce a New Automotive Luxury Car.. know more -  Health is Wealth..... Insurance + Savings... Know More...