Global Offshore to buy 3 more ships; to invest Rs 750 cr

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13 Nov 2011

Global_Offshore_ServicesThe Mumbai-based Global Offshore Services plans to acquire three new vessels to take advantage of the expected buoyancy in demand for offshore oilfield services.

Order for one of them, costing around $50 million, is expected to be placed in the next quarter, said a company official.
At the current price, the total investments would be around Rs 750 crore, he said.
The company, formerly known as Garware Offshore Services, which recently tied up one of its vessels with Petrobras of Brazil for a charter rate of $30,000 a day for a period of four years, plans to bid for more such contracts overseas.
The company currently has two vessels with Petrobras; the second one was contracted for a charter rate of $24,000 a day, for four plus years.
The rising oil price is expected to drive up exploration and production spends by oil companies and this in turn is expected to boost demand for offshore services.
According to reports, Petrobras alone would require more than 100 offshore support vessels in the next few years.
The offshore oilfield service company currently has 12 vessels, of which eight are employed outside India-Europe, West Africa and Far East. The rest are in India working for ONGC.
Mr Aditya Garware, Vice-Chairman and Managing Director, said charter earnings from Petrobras helped the company to report a better second quarter profits.
“Most of our assets are on long-term contracts and therefore, we are in a way, insulated from the market fluctuations. I am not expected to give any guidance, but we hope to do better in the coming quarters,'' Mr Garware said in an interaction with Business Line.
He said the company prefers to build vessel at overseas yards because of the attractive payment terms. The vessel MV Beaucephalus, which is employed with Petrobras, is built at the Havyard Leirvik AS shipyard of Norway.
Offshore service is probably the only segment, which is bucking the bearish trend in the shipping sector. Tanker, bulk carriers and container trade have been facing rough weather as excess tonnage continues to put pressure on freight rates.
Global Offshore has two-fully owned subsidiaries – one in the Netherlands and other in Singapore. Four out of the eight vessels are operated by the subsidiaries.
Q2 results
The company reported consolidated revenue of Rs 52.93 crore and net profit of Rs 5.68 crore for the quarter ended September 30, 2011.
On a standalone basis, the net profits were higher at Rs 7.22 crore on revenue of Rs 32.18 crore.
Mr Sandeep Akolkar, President Finance, said the company's debt-equity ratio of 2.1 is much lower compared to other companies operating in the same field. Therefore, raising funds for additional acquisition will not be an issue.
Global Offshore shares ended Rs 84.40 up by 3.24 per cent on the BSE on Wednesday.
Promoters hold around 33 per cent of the equity of the company.
Source: The Hindu Business Line

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