Jindal Drilling forms JV with Virtue Drilling, gets Rs.1080 crores ONGC order
04 Apr 2008
Jindal Drilling and Industries (JDIL), an arm of DP Jindal group, said on Friday that it has acquired a 49 per cent stake in Singapore-based Virtue Drilling Pte Ltd from another group company Jindal Pipes for Rs.40 crores. The information was made public in a filing with the Bombay Stock Exchange (BSE).
The acquisition was done in order to consolidate its drilling business, JDIL CFO Anil Jain said. JDIL is engaged in the business of offshore oil & gas drilling in India. The company also owns a 49 per cent stake in another Singapore-based firm, Discovery Drilling, and ''so it made sense to buy Virtue from Jindal Pipes,'' Jain said.
The acquisition is expected to be funded from the proceeds of a 10.5 per cent stake sale that the company made to Citigroup for Rs154 crores in December 2007.
After the completion of this deal, both firms would function as a joint venture (JV). One rig has been ordered by each of these firms, which would be operated by the JV on delivery. Virtue Drilling's cantilever offshore jack-up rig ordered from Keppel fels, Singapore, is expected to be delivered in December.
The company has received an order to charter hire of the same rig from ONGC for 5 years valuing at Rs1080 crores. ''The said rig shall be deployed for operations under ONGC-JDIL contract immediately after completion of construction'', JDIL said.
The share markets responded positively to the news as the JDIL's stock ended 2 per cent higher at Rs.1116.00 on the BSE, on a day the benchmark Sensex fell by almost 500 points.
