Balram Chainrai, a Hong Kong-based entrepreneur of Nepali origin, will increase his stake in Asian Oilfield Services Ltd as part of the loss-making Indian company’s fundraising plan to run its operations and cut debt.
Asian Oilfield, which provides geophysical and drilling services to energy and mining companies, said in a stock-exchange filing its shareholders have approved a proposal to allot 4.5 million warrants to Chainrai at Rs 80 apiece. This totals up to Rs 36 crore ($5.3 million). The warrants are convertible into an equal number of equity shares within 18 months.
After conversion, Chainrai’s stake in Asian Oilfield will increase to 12.48% from 0.43%.
The company is also allotting 10 million warrants to promoter firm Oilmax Energy Pvt Ltd at the same price for a total of Rs 80 crore. Oilmax’s stake in Asian Oilfield will rise to 61.3% from 56.32%.
Asian Oilfield had said in November that the planned allotment was aimed at raising funds to run its business operations, repay loans and for general corporate purposes.
The company posted a wider net loss of Rs 17.27 crore for the six months through September 2016 compared with Rs 11.43 crore a year earlier. Revenue slumped to Rs 12.36 crore from Rs 59.03 crore for the six-month period.
Asian Oilfield and Oilmax didn’t respond to email queries seeking comment till the time of filing this article.
Oilmax, a Mumbai-based energy exploration company, had acquired the 56.32% stake in Asian Oilfield last year from private equity firm Samara Capital.
The PE firm exited Asian Oilfield at a loss. Samara Capital had first invested in Asian Oilfield in late 2007, at the peak of the stock market bull run. It hiked its holding in 2010 and 2013.
Since the ownership change in the middle of last year, shares of Asian Oilfield have surged almost four times. The shares closed at Rs 115.80 on the BSE on Tuesday, giving Asian Oilfield a market value of Rs 258.52 crore.
Asian Oilfield is a reservoir imaging company. It offers a suite of geophysical services specialising in land and well seismic services. Its portfolio of services includes 2D and 3D seismic data acquisition, basic seismic data processing, topographic survey, continuous core drilling for mineral and coal-bed methane exploration.
Chainrai’s core company is Hornington Enterprises Ltd. The company makes and trades in electronic goods, home appliances and toys. It also distributes computers and related accessories, and engages in trade finance activities. The company has an annual turnover in excess of $200 million, according to Chainrai’s website.
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