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Quippo Oil and Gas Infrastructure Ltd has sold its 38 per cent stake in derrick lay barge Quippo Prakash for about Rs 635 crore ($122 million).
Quippo Oil and Gas is a wholly-owned subsidiary of Srei Infrastructure Finance Ltd.
The vessel ( Quippo Prakash ) was used to lay sub-sea pipelines for the oil and gas industry in South-East Asia.
Buoyant conditions
The consideration includes returns on both sale of equity shares as well as repayment of a loan from Quippo.
The stake was sold to SapuraKencana of Malaysia, according to a company press statement.
“The offshore oil and gas construction market has shown a sharp upswing since the time Quippo Oil and Gas had invested in the vessel. Having invested when the market had bottomed out, we took advantage of the present buoyant conditions to exit the investment,” said Sunil Kanoria, Vice-Chairman, Srei Infrastructure. Srei does not plan to invest the sale proceeds in the oil and gas business.
Use of proceeds
“We can use this fund for our business purposes. At this juncture we do not want to build our portfolio in the oil and gas business through equity route. We would prefer building our loan book by financing to the sector,” he said.
Outfitted in Singapore and commissioned in 2010, the offshore construction support barge was placed on term charter with an offshore contractor in South-East Asia and was generating returns and cash flows.
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