Aban Offshore fixes QIP floor price at Rs 731.97

Company plans to raise Rs 2,500 crore

Aban Offshore is in the process of raising about Rs 2,500 crore through the qualified institutional placement (QIP) route. The floor price for the QIP, which comes after a gap of five years, has been fixed at Rs 731.97 a share. The last time the company raised money from institutional investors was in 2009.

On Monday, Aban Offshore’s capital issue committee passed resolutions for authorising the opening of the QIP, approving and adopting the preliminary placement document in connection with the QIP, and approval of the floor price for the QIP.

While the company did not disclose how the money will be utilised, experts said it might not go for big asset acquisitions at this point and, hence, will try to repay part of its $2.4-billion debt.

It may be noted that the company had got shareholders’ approval last year to raise up to $400 million (about Rs 2,400 crore) through global depository receipts (GDRs), foreign currency convertible bonds (FCCBs) and other modes. However, the company did not raise the money, saying the market conditions were not favourable. The company still has the option to raise the $400 million, which is over and above the Rs 2,500 being raised through the QIP route.

The QIP’s floor price — Rs 731.97 per equity share — has been calculated based on the pricing formula prescribed under the Sebi Regulations. The Capital Issue Committee was informed about the need to enter into a placement agreement with Axis Capital Ltd as the Global Coordinators and Book Running Lead Manager and SBI Capital Markets Ltd and ICICI Securities Ltd in connection with the issue, the company said in an announcement to the BSE.

Aban Offshore is among the world’s 12 largest offshore service providers specialising in drilling services for offshore exploration and production of hydrocarbons globally.

The company has diverse rig portfolio comprising 15 jack-ups, two drill ships and one floating production unit to suit diverse customer needs and requirements. It also owns 18 offshore assets - low vintage fleet with 50 per cent of rigs less than eight years old with an estimated order backlog of $1.1 billion as on March 31, 2014.