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Aban Offshore in discussion with lenders on repayment issues
The company has nine out of 18 rigs working while others are idle at the end of September. Aban Offshore is in talks with its lenders to settle the issues related to repayment of loans, at a time when the offshore drilling contract business has been highly competitive and almost half of its rigs are idle at present. Outstanding payments from Iran is around $250 million as of September, this year, said senior management officials of the company.
It is expected to repay $120 million this year and plans are to pay back $130-140 million in FY18. According to reports in September last year, the company had a total debt of around $2.2 billion. Responding to a question by analysts in an earnings call, on whether there is a need to restructure the company’s debt repayment obligation to manage the debt given that it is very low principal payments, S Srinivasan, senior vice president, Aban Offshore Ltd, said the company is in constant discussion with its lenders on how to address the issue.
There has been some delay in repayments because the collection has also been delayed from Iran, the market size is down, among other issues. “We have been discussing with the bankers to see how it can be done,” he said. However, he refused to reveal more on the talks, stating that nothing has been finalised yet. The company has nine out of 18 rigs working while others are idle. The market continues to be sluggish because of the oil prices and the company is facing extreme competition in terms of bidding, he added.
“We are incurring some losses on idle rigs, which is less than $10,000 per rig for idle rig. We have on cycled the rigs, so it can go for any work, small or long term at the earliest possible opportunity,” he said. This year, the company is repaying debt of about $120 million and in FY18, it is expected to pay around $130-140 million. While it is getting some amount of payments from Iran, which was earlier facing a sanction, but still it has to receive a large sum from that country, he added. Sam Reinhart Jersey
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