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2:5 swap for Aban Loyd Hitech Drilling merger

Our Bureau

CHENNAI, July 25

THE Chennai-based Aban Loyd Chiles Offshore Ltd is to merge Hitech Drilling Services India Ltd in which it holds an 86.5 per cent stake with itself.

This was decided at a meeting of the boards of the two companies today.

The meetings decided on a swap ratio, as recommended by N.M. Raiji, auditors. For every five fully paid-up equity share of Rs 10 each of Hitech, two fully paid equity shares of Rs 10 each of Aban Loyd will be allotted; for every five equity shares of fac e value of Rs 10 each on which Rs 5 per share paid up (partly paid) of Hitech, two equity shares of face value of Rs 10 each of which Rs 5 per share paid-up (partly paid) of Aban will be allotted.

The merger, according to Aban Loyd officials, will be effective April 1, 2001. The courts will be approached after which extraordinary general meetings of the shareholders will be convened to seek their approval for the merger.

Aban Loyd's paid-up equity capital, which is now about Rs 6.27 crore, will go up to about Rs 7.3 crore after the merger. The shareholding of Aban's promoters, which is now about 48 per cent, will drop marginally post-merger, according to the officials.

It may be recalled that Aban Loyd bought a 22.5 per cent stake in Hitech Drilling from Tata Industries Ltd at Rs 92 per share and later made an open offer to acquire the remaining 77.5 per cent at the same price.

According to Aban officials, the company holds an 86.5 per cent stake in Hitech Drilling and the balance is with the public. The total cost of acquisition works out to Rs 160 crore, according to them.

The merged entity will make Aban Loyd the largest offshore drilling company in the private sector, according to the officials.

The acquisition adds a 300-feet jack-up drilling rig and one floating production facility to Aban's existing two offshore rigs.

For the quarter ended June 30, 2001 Aban Loyd had a net profit of Rs 1.06 crore on a turnover of Rs 16.78 crore. For the corresponding quarter in the previous year, it had a net profit of Rs 1.77 crore on a turnover of Rs 21.65 crore.

The drop in income from operations - from Rs 21.24 crore during April-June 2000 to Rs 16.33 crore in April-June 2001 - was because of dry-docking of the rigs.

The rigs have just come back and will be deployed in a new contract from the end of the month with Cairns Energy, according to the officials.

Other income was Rs 44.39 lakh (Rs 41.07 lakh), consumption of stores and spares Rs 74.63 lakh (Rs 1.91 crore), staff cost Rs 99.41 lakh (Rs 1.15 crore), other expenditure Rs 3.24 crore (Rs 3.41 crore), rental charges to machinery Rs 5.58 crore (Rs 5.94 crore), interest Rs 2.61 crore (Rs 2.87 crore), depreciation Rs 2.52 crore (Rs 3.57 crore) and provision for taxation nil (Rs one crore).