Aban Offshore, the tenth largest offshore drilling firm in the world, is likely to raise anywhere between $450 million and $500 million by offloading part of its stake in its Singapore subsidiary Aban Singapore Pte Ltd (ASPL). The company is likely to raise the funds through an initial public offering (IPO) in Singapore some time in next fiscal. The funds raised through the IPO will be used to part-finance its outstanding debts of over $2.5 billion which it had piled up for a serious of leveraged acquisitions.
Aban on Thursday announced its latest acquisition of the semi-submersible rig, Bulford Dolphin, for a consideration of $211 million from Bulford Dolphin Pte of Singapore. Early this year, the company has hit the headlines in the media by announcing the acquisition of 100% stake in Sinvest ASA of Norway for an enterprise value of $1.35 billion. Aban has funded the Sinvest acquisition based on a debt-to-equity ratio of 4.4:1.
According to sources in the know, Aban is expected to float 10% to 15% stake in Singapore subsidiary Aban Singapore Pte Ltd to raise anywhere between $450 million and $500 million. ?Aban Singapore has an enterprise value of over $3 billion and hence the dilution of 10% to 15% stake in the company should fetch anywhere between $450 million and $500 million depending on the market conditions. The promoters are expected to keep 75% stake in the company post IPO?, an analyst with a leading brokerage house told FE on conditions of anonymity.
The company, early this year has raised $150 million by issuing foreign currency convertible bonds to four investors. On conversion, this would translate into a tad over 10% of its equity. The IPO will also help the investors to get an exit option from the company if they desired so, sources added.
According to sources, Aban has reportedly roped in Merril Lynch and another merchant banker as lead managers of the IPO of its Singapore arm. Merril Lynch had advised the company in its acquisition of Sinvest earlier this year.
Incorporated in 1986, Aban Offshore has become the third largest offshore drilling company in the world after it acquired the Sinvest of Norway. The promoters are holding 62.35% stake in the company. For the quarter ended June, 2007, it has clocked a turnover of Rs 127.61 crore and a net profit of 28.37 crore. The company stock closed on NSE on Friday at Rs 3,034.90.
