BackLenders push for sale of GOL Offshore’s asset
Creditors of GOL Offshore Ltd push for the sale of assets pledged as collateral to recover money owed by the cash-strapped company
Premium
Mumbai: Creditors of GOL Offshore Ltd are pushing for the sale of assets pledged as collateral to recover money owed by the cash-strapped company, which had ₹ 2,179 crore of debt on its books as of 14 August.
Some lenders to the company, formerly known as Great Offshore Ltd, have approached shipping companies to push the asset sales, two persons close to the development said on condition of anonymity. The assets include a multi-support vessel, platform supply vessels and drilling rigs.
Creditors of GOL, which offers drilling and marine construction services to oil and gas producers, include DVB Bank SE of Germany, HSBC Holdings Plc’s India unit, Axis Bank, ICICI Bank Ltd and Export-Import Bank of India.
GOL Offshore is controlled by debt-laden Bharati Shipyard Ltd. Bharati Shipyard’s units Natural Power Ventures Pvt. Ltd and Dhanshree Properties Pvt. Ltd hold 36.75% and 12.96% of GOL offshore, respectively; total promoter holding was 49.72% as of 30 June 2014.
Prakash Chandra Kapoor, chairman of GOL Offshore, admitted there were issues with bankers, but said “it has been sorted out".
“We have decided to sell some of our assets," said Kapoor, adding that selling and buying assets are part of the normal course of business.
However, he declined to divulge details of the bankers, any default on loans and the proposed asset sales.
Kapoor also affirmed there is no pressure on the firm from banks to sell the assets.
The 2008-09 global financial crisis, followed by the domestic economic downturn of the past two years has made it difficult for many borrowers to service debt, leading to a pile-up of bad loans in the banking industry.
DVB Bank, a German bank that specialises in transport finance and is part of the DZ Bank Group, has maximum exposure to GOL Offshore, said one of the two persons cited above.
After a default by GOL Offshore, DVB started the process of finding buyers for the assets of the company after securing necessary approvals from the Reserve Bank of India (RBI) and other agencies, the person said. DVB’s move had prompted other banks, including domestic lenders, to push for asset sales to recover the loan, he added.
DVB Bank, other creditors and RBI did not reply to emails seeking comment. Typically, banks do not comment on their exposure to specific clients.
“The firm has defaulted on a loan and the lenders are now trying to sell some of the assets like oil drilling rigs to recover the money," said the second person cited above, an investment banker directly involved in the transaction.
“SBI Capital Markets Ltd and Axis Bank have been trying to negotiate deals for the same. The buyers will be strategic ones."
He put the size of the loan default by GOL Offshore at about ₹ 3,000 crore. Mint could not independently verify this amount. According to the firm, GOL Offshore had ₹ 2,179 crore of outstanding debt as of 14 August.
A senior executive with Mumbai-based shipping firm, requesting anonymity, confirmed that the company had been approached by a bank-led consortium to buy the assets of GOL Offshore including offshore supply vessels and oil drilling rigs.
“We are evaluating the assets. It is not certain that we will buy those," he said.
Debasish Mishra, senior director, consulting, Deloitte Touche Tohmatsu India Pvt. Ltd, said the E&P (exploration and production) activity in domestic oil and gas sector had seen a considerable slowdown in the last 5-6 years, hurting services firms.
“Uncertainties around gas pricing, confusion in the earlier rounds of NELP (New Exploration Licensing Policy) took a toll on the domestic exploration activity to a historic low with only two rigs in operation right now," he explained.
“The new government is trying to improve domestic exploration environment by coming out with clear policies on restructuring existing PSCs, policy on marginal fields, matured fields, clarity on next round of NELP, gas pricing, etc. All these would have a positive impact on the services companies as well."
GOL Offshore was spun off from Great Eastern Shipping Co. Ltd in 2006; in 2009, Bharati Shipyard acquired a 14.89% stake in GOL Offshore after its founder Vijay Sheth forfeited shares pledged with Bharati Shipyard.
Subsequently, Bharati Shipyard hiked its stake via an open offer and through negotiated deals.
In 2012, Bharati Shipyard was referred to the corporate debt restructuring (CDR) cell after it failed to service ₹ 5,800 crore of loans. The CDR was unsuccessful and earlier this year lenders sold a majority of their exposure to Edelweiss Asset Reconstruction Co. Ltd.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
