 "Aban Offshore surges on rating upgrade")
Shares of Aban Offshore has surged nearly 13% to Rs 470 on NSE on back of heavy volumes on after the rating agency Credit Analysis & Research (CARE) upgraded the credit rating of the oil exploration and production company.
Till 1053 hours, a combined 5.16 million shares already changed hands on the counter as against an average sub 2 million shares that were traded daily in past two-weeks on NSE and BSE. The stock opened at Rs 418 and touched high of Rs 475 on NSE so far.
CARE has upgraded Aban Offshore credit ratings on long term and short term bank facilities from D to BB-.
“The revision in the ratings assigned to the bank facilities of Aban Offshore takes into account improvement in capital structure consequent to mobilization of fresh equity during FY14 (refers to the period April 1 to March 31) and H1FY15, improvement in the financial performance during FY14 and H1FY15 and completion of refinancing of debt at the group level”, CARE said in a statement.
The ratings continue to be constrained by relatively high leverage at the consolidated level, high debt in relation to cash accruals, high utilization of working capital limits, non-deployment of few of its rigs and inherent risks in the off-shore drilling industry. The ratings continue to factor in the strong competitive position of Aban Offshore in the industry, experience of promoters and management.
Going forward, timely deployment of rigs going off the contract, optimum deployment of its fleet, changes in day rates, effective cash flow management notwithstanding improvement in liquidity position in the recent past would be key rating sensitivities, it added.
Till 1053 hours, a combined 5.16 million shares already changed hands on the counter as against an average sub 2 million shares that were traded daily in past two-weeks on NSE and BSE. The stock opened at Rs 418 and touched high of Rs 475 on NSE so far.
CARE has upgraded Aban Offshore credit ratings on long term and short term bank facilities from D to BB-.
“The revision in the ratings assigned to the bank facilities of Aban Offshore takes into account improvement in capital structure consequent to mobilization of fresh equity during FY14 (refers to the period April 1 to March 31) and H1FY15, improvement in the financial performance during FY14 and H1FY15 and completion of refinancing of debt at the group level”, CARE said in a statement.
The ratings continue to be constrained by relatively high leverage at the consolidated level, high debt in relation to cash accruals, high utilization of working capital limits, non-deployment of few of its rigs and inherent risks in the off-shore drilling industry. The ratings continue to factor in the strong competitive position of Aban Offshore in the industry, experience of promoters and management.
Going forward, timely deployment of rigs going off the contract, optimum deployment of its fleet, changes in day rates, effective cash flow management notwithstanding improvement in liquidity position in the recent past would be key rating sensitivities, it added.