Central Bank of India has withdrawn insolvency case against Chennai-based Aban Offshore Ltd after the troubled oil rig paid dues under One-time settlement. The company has been in talks with lenders for a debt resolution plan.
The company, which provides offshore drilling services for exploration and production of oil and gas, has paid an outstanding principal of Rs 121.78 crore to Central Bank. The public sector lender had filed suit against the company under section seven of Insolvency and Bankruptcy Code 2016 (IBC), the company informed BSE. Its stock closed 8.6 per cent higher at Rs 59.35 per share.
Lenders who have exposure to ailing the company include Bank of Baroda, Export Import Bank of India and IDBI Bank, according to the firm’s annual report for FY22.
One senior executive with a private bank said this borrower has been selling oil rigs in stages and paying off dues of the lenders in small amounts. The securities or collateral provided for each bank or lender is different.
The company embarked on the exercise to sell 14 rigs owned by the Company and its step-down subsidiaries (including five rigs in the current financial year) following Board and shareholder approval. Six rigs have already been delivered and transactions completed, which helped moderate debt, it said in Fy22 report.
The Company generated revenues worth Rs 598.3 crore in 2021-22 compared to the previous year’s revenue of Rs 1,069.4 crore. The company reported a net loss of Rs 2,689.7 crore in 2021-22 compared with a net loss of Rs 1,502 crore in 2020-21. At the close of 2021-22, the Company’s rigs were operating under a balanced mix of long-term and short-term contracts.