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Aban Loyd to buy 3 more jack-up rigs — Gets shareholders' nod to raise $100 m

M. Ramesh

Chennai , April 25

ARMED with shareholders' permission for raising $100 million from the overseas market, Aban Loyd Chiles Offshore Ltd has readied itself to acquire "two or three more jack-up rigs," should an opportunity for such a purchase arise.

Aban Loyd provides offshore drilling services to oil companies. Till December last, the company focused exclusively on opportunities from within India, serving mainly ONGC. In December, it forayed into international waters — one of its five rigs is doing work for an Iranian oil company.

Firm crude prices have led to enhanced interest in exploring for oil and as a consequence the market for drilling services is good. Aban Loyd expects this trend to continue for several more years and intends to capitalise on the opportunity by pressing more rigs into service.

Mr Reji Abraham, Managing Director, Aban Loyd, told Business Line that the company would like to continue acquiring rigs, but "nobody is selling". Opportunities to buy come, but are immediately seized in the market. That is why Aban Loyd wants to be ready with the money.

The company owns five rigs, one drill ship and one floating production unit. In January, all of them were put on long-term contracts (two to three years). For small companies like Aban Loyd it makes sense to ensure business for all the rigs, according to Mr P. Venkateswaran, Director, who looks after operations.

The company wants to buy more rigs with an eye on business from West Asia, Mr Abraham said.

Meanwhile, the company announced its unaudited results for 2004-05 to its shareholders at an extraordinary general meeting. Net profit for the year grew 6 per cent to Rs 50.11 crore, from Rs 47.29 crore in 2003-04. Turnover increased to Rs 288 crore from Rs 276 crore previously.

Answering a question from a shareholder, Mr Reji Abraham said that the company expected the turnover to touch Rs 400 crore in the current year.

Shareholders also approved resolutions enabling the company to raise its authorised capital to Rs 1,000 crore from Rs 200 crore, to issue cumulative redeemable preference shares on private placement basis, to raise $100 million (Rs 450 crore) from overseas market and split the company's shares of Rs 10 each into five shares of Rs 2 each.

Shareholders okay stock split

SHAREHOLDERS of Aban Loyd approved a resolution to split the company's shares of Rs 10 each, into five shares of Rs 2 each.

But is the company planning one more stock split? That the answer is `yes' was hinted by the company's Managing Director, Mr Regi Abraham. A shareholder asked why the company's shares could not be split into 10 shares of Re 1 each, when the company's stock is quoted at nearly Rs 2,000.

Responding to this, Mr Abraham said the company's board deliberated on whether the share should be split into five shares of Rs 2 or 10 shares of Re 1.

But it decided on a Rs 2 share so as to leave room for one more stock split, should the stock prices rise further.

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