Aban Offshores reinsurer agrees to settle claim

Written by Sajan C Kumar | Chennai | Updated: Jul 29 2010, 06:39am hrs
Aban Offshore Ltd, which has been floating in debt, has got a much needed breather as reinsurers agreed to settle the insurance claim relating to the sinking of its semi-submersible rig Aban Pearl at the assessed insurable value of $ 235 million. Aban, which suffered a major financial blow after its semi submersible sank in the Venezuela in May this year, already has a debt of $3,279 million (around Rs 16,600 crore) on its books.

The company had firmed up plans in March to repay the debt of $1,226 million within a span of 10 years. Regarding the insurance claim relating to the sinking of the semi-submersible rig Aban Pearl, the reinsurers had agreed to settle the claim at the assessed insurable value of $ 235 million. Approximately 97% of the claim amount has been received and the balance amount is likely to be received shortly", Aban said in regulatory filing with the exchanges on Wednesday .

Despite the choppy waters, the Chennai-based Aban was trying to set off for a long haul in the deep sea, armed with a decision to raise resources through a mix of debt instruments.

The board of dirctors of the company had in May last week decided to raise long term resources through the issue of FCCBs, GDRs and ADRs not exceeding to $ 400 million along with raising anadditional Rs 2,500 crore by way of issueing equity or equity linked instruments.

Aban has placed all of its assets during the last twelve months , despite difficult market conditions. All of the 15 jack-ups are in contract now and eight out of the nine new-build jack-ups are in longer term contracts of three years or more. The other two drillships have just finished their contracts and are being actively marketed for long term opportunities, the company stated.

Despite the loss of semi submersible rig Aban Pearl which recently sank in Venezuelan waters, the company is sparing no efforts to find replacement floater and intends to continue its growth plans in the deepwater segment, it added.

It may be recalled that the mounting debt on Aban's book and its repaying capacity have raised concern among its creditors and analysts in the wake the company losing its semi-submersible Aban Pearl recently.