An Indian financial newspaper on Friday carried a notice that said the auction will take place on July 20 in Houston, Texas. The minimum bid amount, it said, had been fixed at $6.85 million, implying a floor price of R135 a share. When contacted, David Jones of Porter Hedges, the attorney for the bankruptcy trustee, explained that the rights to the shares were being auctioned. Documents relating to the case say the initial bidder is India Offshore, which is a qualified bidder.
Despite repeated attempts, officials of Aban offshore, Indias largest offshore drilling and oilfield services provider, could not be contacted. According to data from the Bombay Stock Exchange, as of March 31, 2011, Aban Offshore had pledged 70,26,900 shares while the total number of shares outstanding was 4.35 crore of R2 paid-up each. The notice adds that together with the shares, the dividends thereon and all stock splits and any stock resulting from the exercise of any contractual derivate rights and all claims arising out of or related to the foregoing, including all litigation, claims owned by the Trustee in Adversary Proceedings Nos 11-3085 and 11-3203 will be auctioned.
The auction of 5% of Abans equity will put downward pressure on the stock. While we do not expect the deal to be executed at the floor price of Rs 135 per share, we note that the floor price is still about 70% below the current market price, analysts at Edelweiss Research observed. The companys shares closed at R513.85, down 2% on Friday on the BSE.
In the fiscal ended March 31, 2011, Aban reported revenues of R3,347.2 crore and a net profit of R784 crore. As of March 31, 2011, promoters held 53.81% in the company while the remaining 46.19% is held by the public. The companys outstanding debt is approximately $2.8 billion. The company suffered a setback last May when its semi-submersible rig Pearl sank off the coast of Venezuela.
In a notice to the stock exchanges on June 30, Aban Offshore said it had redeemed 30% of the outstanding face value of cumulative redeemable preference shares in June 2011. In June 2005, Aban had issued 15 crore non-convertible 8% of R10 each, of the aggregate face value of R150 crore.
Last year, the company recovered 97% of the insurance claim on Pearl. Its assessed insurable value was $235 million.