Aban Offshore, India?s largest offshore drilling contractor in the private sector, has bagged a R1,050-crore contract from ONGC for deployment of its drillship Aban Ice for a period of three years. The contract is likely to commence during July 2013.
Earlier, the Chennai-based company had signed a contract in May for the deployment of the jack-up rig Deep Driller 7, owned by the company?s step-down subsidiary Offshore Mexico for a period of 1,005 days, ending December 31, 2015. The estimated revenue from the deployment was estimated at about R828 crore.
This contract is expected to commence during the last quarter of calendar year 2013. In May itself, Aban had signed yet another contract for the deployment of jack-up rig Deep Driller 1 for a period of 1,115 days. The estimated revenue from the deployment was estimated at about R955 crore.
According to analysts, these contracts will bring in much-needed relief to the company. Aban Offshore has a debt of over R11,000 crore on its books, which has been making a dent on the company?s profitability and valuations. An analyst tracking the sector told FE, ?Though this contract will provide a much-needed a relief to the debt-ridden company, the problem of high debt continues.?
Last week, the board of director of Aban Offshore had approved the raising of additional long-term resources through issue of FCCBs, GDRs and ADRs around $400 million. The board also okayed the issue of equity-related securities to qualified institutional buyers upto R2,500 crore. The analyst said the firm?s efforts to bring down the interest cost by converting the rupee loans to foreign currency debt may yield some results going forward.