Aban Offshore's QIP

Aban Offshore's qualified institutional placement (QIP) which opened on Friday will close today. The company is looking to raise a maximum of Rs.1,000Cr, sources indicate that an equity dilution of nearly 13% pre-issue capital is likely. Most of the capital will be used to pay off the debt.

Aban had made an announcement on Friday saying that the QIP book is open at a price of about Rs.1224.28, which is about Rs.12 discount to the Friday’s closing price of Rs.1236.

The preliminary placement document says that
- 17 of their 20 rigs are under contract as on September 30.
- The total outstanding debt as on March 31 was about Rs.16,635Cr.
- The substantial portion of the cash flow and the money raised from the issue is likely to go into a repayment of debt.
- The total contract drilling services backlog is about 2.371 billion as on Sept 30.
- The management indicates that their contracts will suffice to pay the debt.

It is oversubscribed and the company has successfully raised about USD 150 million.