Aban Offshore Ltd (Aban), the world’s tenth largest offshore drilling and services company, may sell its close to 20% stake in Norwegian company Petrojack, ASA to part-finance its latest acquisitions. Aban is holding 20% stake in Petrojack through its wholly-owned Norwegian subsidiary Sinvest, ASA, which it had acquired earlier this year for an enterprise value of $1.35 billion. The company had bought Sinvest through its Singapore arm, Aban Singapore Pte Ltd, in one of the biggest ever leveraged buy outs (LBOs) in the offshore drilling space.
According to sources in the know, Aban is likely to sell its stake in Petrojack which it holds through Sinvest to raise funds to service its debt obligation. The company had piled up the debt through a series of highly leverages acquisitions recently. The acquisitions, while catapulting Aban to the 10th slot in the offshore drilling space, also added close to $2 billion in debt on its book. Company sources were not available for comment.
According to sources, it does not make business sense for Aban to hold on to its Petrojack stake as the group is not planning to hike its stake in the Norwegian company. It is also reported that the promoters of Petrojack is planning to sell their entire stake in the company for a consideration of $600 million. Going by the valuation, the company could rake in a cool $100 million by exiting Petrojack, sources pointed out. The company would use the funds raised through the stake sale to part-finance its earlier acquisitions.
The company had entered into memorandum of understanding (MoU) with Bulford Dolphin Pte Ltd for the purchase of its semi-submersible rig Bulford Dolphin for a consideration of $211 million. It had not revealed its plans about the funding structure of this acquisition. It is also planning to list its Singapore subsidiary to raise funds to the tune of $500 million to $600 million.
For the first quarter ended June this year, Aban had clocked a net sales of Rs 127.61 crore and a net profit of Rs 42.20 crore. The company stock closed on National Stock Exchange on Monday at Rs 3,511.25.
