Aban Loyd Raising Cash for Jackup Purchases

Armed with shareholders' permission for raising $100 million from the overseas market, Aban Loyd Chiles Offshore Ltd is preparing to acquire "two or three more jackup rigs," should an opportunity for such a purchase arise.

Aban Loyd provides offshore drilling services and, until recently, 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 under contract to an Iranian oil company.

Firm crude prices have led to increased interest in exploration and as a consequence the market for drilling services is good. Aban Loyd expects this trend to continue and intends to capitalize on the opportunity by acquiring more rigs.

Mr. Reji Abraham, Managing Director, Aban Loyd, said 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.

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