Offshore drilling contractor Aban Offshore plans to strengthen its balance sheet by refinancing its debt for a longer tenure resulting in repayment capability and also for comfortable cash flows.
"The company intends to strengthen its balance sheet by refinancing debt for a longer tenure resulting in a comfortable interest cover," the city-based company said in its annual report.
The company refinanced its debt for a longer tenure of 15 years which aligned debt tenures with the long term nature of the company's assets and reduced considerable stress on the company's repayment capability and projected cash flows, it said.
Noting that the global rig market was marked by significantly higher demand for new rigs, the company said, "East Africa has emerged as one of the new global explorations witnessing a demand for oil rigs".
"One of the interesting developments is that some new global exploration frontiers have emerged, widening the market for drilling and rig deployment. East Africa is one such destination where there has been an increase in demand for oil rigs...," it said.
The company reported a 102.74 per cent increase in its profit after tax from Rs 1,938.73 million for the period ending March 31, 2013 to Rs 3,930.65 million for March 31, 2014.
Attributing the increase in profit after tax to some of its decisive initiative, the company said, "even as the external currency environment remained volatile, the company also converted its loans into dollar denomination, progressively emerging as a currency-neutral corporate with revenues also in dollar denomination".
"This was a significant step in the area of risk management," it said.
On the opportunities for the rig industry, the company said the global exploration and production spending was poised to reach USD 723 billion in 2014 up by 6.1 per cent from USD 682 billion in 2013.
