The debt-ridden Aban Offshore is set to get some relief when it receives funds from the sell out of 50% shares of its subsidiary Sinvest AS, in Venture Drilling AS.
The country?s largest offshore drilling contractor has said recently that its subsidiary Sinvest AS will sell its entire holding of 50% shares in Venture Drilling AS for a consideration of $ 34 million. ?Sinvest AS, which is a step-down subsidiary of the company, has entered into an agreement with Petrolia ASA, Norway, to sell its entire holding of 50% shares in Venture Drilling AS. After completion of the transaction, Sinvest shareholding in Venture Drilling AS will become nil,? Aban Offshore said in a filing to the Bombay Stock Exchange. Venture Drilling was a 50-50 joint venture between Sinvest and Petrolia Drilling. The Chennai-based Aban Offshore, through its subsidiary Aban Singapore Pte, had acquired the stake in Norwegian company Sinvest in 2006.
According to analysts, the debt-ridden Aban Offshore will get some relief in terms of servicing the debts. In February itself Venture Drilling AS, had signed an agreement for early re-delivery of a drillship to its Russian owner Arktikmorneftegazrazvedka, receiving a cash amount of $138 million which covers purchase price for all equipment onboard.
Aban, which suffered a major financial blow after its semi submersible rig Aban Pearl sank in the Venezuelan waters in the month of May last, already has a debt of $3,279 million (around R16,600 crore) on its books. The company had firmed up plans in March 2010, to re-pay debt to the tune of $1,226 million within a span of 10 years. The company has got a breather as reinsurers agreed to settle the claim relating to the sinking of the semi-submersible rig Aban Pearl at the assessed insurable value of $ 235 million.
Aban was trying to set for a long haul in the deep sea, armed with decision to raise resources through a mix of debt instruments. The board of directors of the company had in May 2010 decided to raise long term resources through the issue of FCCBs, GDRs and ADRs not exceeding to $ 400 million with additionally going for another R 2,500 crore by way of issuing equity or equity linked instruments.