Central Bank of India, Aban Offshore move towards settlement on Rs 155 crore dues

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Updated: October 2, 2019 6:44:02 AM

Its total income, on a consolidated basis, plunged to Rs 138.46 crore from Rs 343.27 crore it earned in the corresponding quarter of last fiscal.

The auditor to the debt-ridden Aban Offshore had raised concern in August over the ability of the company to continue as a going concern, mainly based on the review report of the company’s subsidiaries, by another audit firm.

Chennai-based Aban Offshore, one of the largest private offshore drilling service providers in the country, is in the process of settling its dues with one of its lenders, Central Bank of India. The bank has withdrawn its insolvency application against the company at the Chennai bench of the National Company Law Tribunal (NCLT) consequently.

The application for the Corporate Insolvency Resolution Process against Aban Offshore was filed by the bank some time ago, alleging that the company has defaulted on around `155 crore. The principal amount is around `127 crore, while the rest is interest and others, sources in the know said.

When the matter came up for hearing on Tuesday at the NCLT, both parties informed the Bench that they are settling the dispute. The company is expected to repay the debts in five-six months.

Aban Offshore has a debt burden to the tune of $ 2.3 billion on its books. The company had reported a consolidated net loss of Rs 386.41 crore in Q1 of FY20 against the net loss of Rs 312.77 crore in the corresponding quarter last fiscal.

Its total income, on a consolidated basis, plunged to Rs 138.46 crore from Rs 343.27 crore it earned in the corresponding quarter of last fiscal.

The auditor to the debt-ridden Aban Offshore had raised concern in August over the ability of the company to continue as a going concern, mainly based on the review report of the company’s subsidiaries, by another audit firm.

The auditor, P Murali & Co, pointed out, a review report by another auditor Nexia TS Public Accounting Corporation, Singapore, on the consolidated results of Aban Holdings Pte Ltd, Singapore, along with its subsidiaries and associates, which recorded that the Aban Group has defaulted on the payment of their borrowings which have fallen due and have breached the covenants of their
borrowings. These covenants give the lenders the right to demand the related borrowings be due and payable immediately.

According to Nexia, the lenders have issued recall notices to the Group. Though the management had reclassified these borrowings of the Group with original repayment terms beyond 12 months from the balance sheet date as current liabilities, the Group has not concluded any renegotiation, obtain replacement financing or raise funds through any fund-raising exercises
as discussion are still going on with
the lenders.

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