Petrojack ASA, a Norway-based company in which Aban Offshore holds 18% stake, filed for bankruptcy last week.
Aban had paid Rs 194 crore for the 18% stake, which at the current market price of 1.09 Norwegian krone is valued at Rs 10 crore.
Aban’s stake in Petrojack was through its wholly-owned Norwegian subsidiary Sinvest, ASA, which it had acquired in 2007 for $1.35 billion.
The company had bought Sinvest through its Singapore arm, Aban Singapore Ltd, in one of the biggest leveraged buyouts in the offshore drilling space.
S Srinivasan, vice-president, corporate planning, Aban Offshore, said, “We got stuck with Petrojack after we acquired Sinvest, but the other two companies in which Sinvest held stakes — Scorpion Offshore and Ocean HeavyLift ASA— we could realise the stakes and exit. With Petrojack we got stuck.”
He said that Petrojack started having problems when it could not pay the dues to its bond holders and the company also sold 3 of its 4 rigs.
When contacted, a Petrojack spokesperson said that the company is in talks with Aban with regards to the final settlement.
Srinivasan said Aban was never expecting to earn any income from the investment in Petrojack and that they have not incurred any cash loss.
“Our auditors are working out as to what suitable accounting treatment needs to be given to this investment,” he said.
According to an analyst with a foreign research firm, the repercussions for Aban will be minor and the stock will
correct by Rs 40-45 even if the entire Rs 194 crore goes down the drain.
There have been speculations that Aban was trying to exit its stake in Petrojack for a long time now in order to raise funds to service its debt obligation.
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