On July 20, the bankruptcy trustee for a US company called Guyana Development Corporation, will conduct an auction of the company's interest in 2.28 million equity shares of Aban Offshore — says an auction notice.

Business Line has learnt that the shares belong to Aban Offshore's US partner, India Offshore Inc, with which Guyana Development Corporation, has a legal tussle. As Guyana Development Corporation has come to ‘chapter 11' (bankruptcy) its “claim” on the Aban Offshore shares owned by India Offshore Inc, is being put on auction.

“The minimum bid is $6.86 million,” the auction notice says. This floor price corresponds to Rs 135 a share. On the BSE, the Aban share, of face value of Rs 2, closed at Rs 513.85 on Friday. This is Rs 10.40, or 1.98 per cent, lower than the previous close.

“The auction of five per cent of Aban's shares will put downward pressure on the stock. While we do not expect the deal to be executed at the floor price of Rs 135 a share, we note that the floor price is still 70 per cent below the current market price,” says a flash note of Edelweiss Securities, a broking house.

“With the tendering activity slowly turning around in the Gulf of Mexico, we maintain our positive stance on the rig market. However, day rates for low-spec and older jack-ups will remain suppressed in the near term,” the note says.

comment COMMENT NOW