ABG Shipyard, which earlier this month exited from a bidding war to gain control of Great Offshore, has stated its? intentions to keep its remaining shares in the offshore oilfield services company,

writes the Wall Street Journal. ABG and unit Eleventh Land Developers
Pvt. Ltd. sold about 3.07 million shares–or an 8.27% stake–of Great
Offshore on Dec. 2. via a secondary market transaction. ABG–India’s
largest private shipbuilder by sales–now has only 571 shares in Great
Offshore.

The transaction followed ABG’s rival Bharati Shipyard Ltd. raising its
price for an open offer to buy an additional stake in Great Offshore to
590 rupees ($12.6), in comparison to ABG’s 520 rupees. The open offers
from ABG and Bharati closed Tuesday.

“We will be holding on to the stake,” Dhananjay Datar, ABG’s chief
financial officer, told Dow Jones Newswires by phone. “We should be
able to know about the response to our open offer by Jan. 8.”

Both ABG and Bharati have said previously that the winning bidder will
gain key inroads into the offshore services sector catering to the oil
and gas sector, which is growing both in India and overseas.

The bidding war began May 7 with Bharati acquiring a 14.89% stake in
Great Offshore and later made an open offer to buy another 20%. This
was followed by a counter offer from ABG and multiple upward revisions
of the offer prices by both companies until ABG decided to sell most of
its stake in Great Offshore.

Bharati owns a 22.48% stake in Great Offshore.

Datar said ABG currently has no plan to acquire stake in any other
offshore oilfield services company. He added that ABG has outstanding
shipbuilding orders of 126 billion rupees, which are to be serviced
until 2014. “Globally, ships are getting decent charter rates,” he
said. “The global shipbuilding market looks robust. We have had no
cancellations so far.”

He further stated that the company is investing 16 billion rupees to
build a new facility at Dahej in the western state of Gujarat. The
facility will include a unit to build jackup oil rigs.

“About 85% of the facility is complete,” Datar said, adding that the
entire facility including a new ship lift should be ready by June. He
added that ABG has no plan to raise funds and will finance the
expansion from its cash reserves, currently at 10 billion rupees. The
company has total debt of INR26 billion to 27 billion rupees, at
10%-10.5% interest rates, he said.

ABG has already received a $440 million order from Essar Oilfield
Services Ltd., a unit of Essar Shipping Ports & Logistics Ltd., to
supply two jackup oil rigs from mid-2011.

Source: SeatradeAsia Online

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