Aban Offshore, the debt-ridden and loss-making offshore drilling services provider headquartered in Chennai, has entered into an agreement with ADES Saudi, to sell four of its deep driller rigs, in a bid to pare a portion of the debt it has on its books.

The sale deal wth ADES Saudi, which is in the business of providing oil field services, will fetch the beleaguered company an amount close to Rs 808 crore.

In a disclosure to stock exchanges, Aban Offshore on Thursday said the board of directors of the company, at their meeting held on March 23, have approved the sale of four rigs – Deep Driller 2, Deep Driller 4, Deep Driller 5 and Deep Driller 6 – owned by its step-down subsidiaries, subject to approval of shareholders, which is being sought through the postal ballot. The sale and purchase agreement between the parties were entered into on Wednesday.

Giving details of the agreement, the company said that while rigs Deep Driller 2 and Deep Driller 4 would fetch $ 26 million or about Rs 198.12 crore each, rigs Deep Driller 5 and Deep Driller 6 are being sold for $27 million or about Rs 205.74 crore each. Through the rig sales, Aban Ofshore would be able to mop up around Rs 808 crore.

ADES Group is an Egyptian company established in 1997, working across West Asia and Africa. It has consolidated all upstream services and projects, both onshore & offshore, in the oil and gas sector into one group. The group is considered the second-largest operator in Egypt and number 1 offshore driller in Egypt and Red Sea region, with a strong employee base of over 1,400 highly qualified employees.

In the notice of postal ballot to shareholders, Aban Offshore said the oil and gas industry was marred by severe downturn for a long period. Though the current recovery is in a nascent stage, the ongoing drilling contracts were committed by the company at low day rates for the medium and long term during the slump phase. In such a situation, the company continues to encounter severe cash flow crisis and the disinvestment would enable to reduce its debt.

Aban Offshore has been contemplating selling some of its rigs and subsidiaries along with a floating production unit in a bid to repay the dues towards a clutch of banks and financial institutions. The company, which has been in a financial mess for quite some time, has a debt burden to the tune of $ 2.3 billion on its books and has been in talks with bankers to find a resolution plan to settle the dues. The decision to sell the assets was taken after a discussion between the company and the consortium of lenders.