maverick
28-12-2007, 07:18 AM
Gremach Infrastructure- Going For Oil
Armed with the proceeds of an IPO made early on in 2007 and another follow-up offering of $ 50 mn in Singapore, Gremach Infrastructure is going head-long into a potentially lucrative field of Drilling for Crude Oil. It’s peer group that comprises of Aban Loyd, Shiv-Vani, Jindal Drilling and Great Offshore are all in possession of long term rent-out contracts with Ongc, Cairns, Videocon and Reliance.
And yet, there is a shortfall in the availability of Oil Rigs across the globe. As Crude makes a run once more for $ 100 a barrel, National Governments will scrounge around for every drop of Oil that can be made available from domestic basins, both off-shore and on-shore.
The NELP VII which has invited global tenders for Oil Drilling, has for the first time opened millions of square kilometers of land for on-shore prospecting of Oil. Gremach Infra-proposes to tap this segment, with the arrival of 4 Chinese built Rigs late in March 2008 and followed up by another 36 to be delivered by mid fiscal 2009.
That apart, Gremach proposes to set up a joint venture involving Larsen and Toubro for offshore prospecting of Oil and joint building of Offshore Oil Rigs and Production platforms. These will be followed up by a multi-purpose SEZ and the listing of its group company Austral Coke, where Gremach will hold a 40 per cent stake and mining Coal in Mozambique.
Huge FII interest
The Gremach Infra stock has been lapped up by FIIs, with UBS A/c Swiss Finance Corporation holding a 5.6 per cent stake, Merrill Lynch with a 7.89 per cent stake, Lehman Brothers with 3.2 per cent, Franklin Templeton with 9 per cent and JM Financial with another 1.3 per cent. This brings institutional holdings in the stock at roughly 27 per cent, and there could be room for more as Gremach’s planned implementation becomes visible.
Prospecting For Crude
Gremach proposes to acquire 40 nos oil & gas drilling rigs, 36 on-shore and 4 off-shore in a period of 3 to 4 yrs at an approximate cost of $ 1 Bn. Gremach has tied-up with Baoiji Oilfield Machinery Company (Bomco), owned by China National Petroleum Corporation (CNPC) for design and manufacture of 4, 2000 HP VFD Oil & Gas Drilling Rigs. The contract is extendable to an additional 36 Rigs. If all goes well, Gremach and Bomco, may form a JV which will be listed on the Singapore Stock Exchange, with Bomco holding a 8 per cent stake in the Singapore SPV named Petrogrema Energy Pte Ltd.
The Oil Drilling business is considered highly profitable, with projected IRR of 35 per cent, the pay-back period works out roughly 3 years. Rig rentals per day, for Off-Shore Rigs have risen by 13 per cent in 2007 averaging around $ 3 to $ 5 lac per day.
Playing for Coal
Gremach has recently acquired a 75 per cent stake in a Mozambique based Company having 11 prospecting licenses of Coal, aggregating an area of 13520 Hectares, in the prime region of Moatize. This region falls in the Karoo basin which is recognized as a Prime Hard Coking Coal bearing area in Africa. Expected reserves in the prospecting area are estimated at more than 200 million tonnes and the first two mines could become operational by mid 2008. The 11 Coal Blocks acquired by Gremach, are very close to the prime Coal producing blocks owned by Companhia Vale do Rio Doce (CVRD).
With Natural Resources getting scarce JSW group, Ispat Industries and Tata Steel have recently made acquisition of coal mines in Mozambique. Incidentally, Tata Steel acquired a 35 percent stake in the Australian firm Riversdale Mining, which has a Coal Project in Mozambique for Australian $ 100 million (about $85 million). Companhia Vale do Rio Doce (CVRD), the world's largest iron ore producer is investing $2 billion in Mozqmbique thereby developing the Southern Hemisphere's biggest mines for Coal.
Listing Group Company and setting up a Metal SEZ
The Company's group Company Austral Coke & Projects Ltd.which manufactures Low Ash Met Coke may get listed in 2008, unlocking value for the shareholders of Gremach. Completing the bouquet of offerings Gremach would be setting up a Metal SEZ in Distt. Kolhapur of Maharashtra. Gremach has already acquired about 200 acres of Land wherein it would be be setting up its own API grade Spiral welded Pipe (Saw Pipe) plant costing about Rs 250 crore.
Summation
Once completed, Gremach would have graduated from being a construction equipment lending concern to one that owns Oil Rigs, Coal Mines in Mozambique, a SAW Pipe plant and a Metal SEZ in Maharashtra.
Armed with the proceeds of an IPO made early on in 2007 and another follow-up offering of $ 50 mn in Singapore, Gremach Infrastructure is going head-long into a potentially lucrative field of Drilling for Crude Oil. It’s peer group that comprises of Aban Loyd, Shiv-Vani, Jindal Drilling and Great Offshore are all in possession of long term rent-out contracts with Ongc, Cairns, Videocon and Reliance.
And yet, there is a shortfall in the availability of Oil Rigs across the globe. As Crude makes a run once more for $ 100 a barrel, National Governments will scrounge around for every drop of Oil that can be made available from domestic basins, both off-shore and on-shore.
The NELP VII which has invited global tenders for Oil Drilling, has for the first time opened millions of square kilometers of land for on-shore prospecting of Oil. Gremach Infra-proposes to tap this segment, with the arrival of 4 Chinese built Rigs late in March 2008 and followed up by another 36 to be delivered by mid fiscal 2009.
That apart, Gremach proposes to set up a joint venture involving Larsen and Toubro for offshore prospecting of Oil and joint building of Offshore Oil Rigs and Production platforms. These will be followed up by a multi-purpose SEZ and the listing of its group company Austral Coke, where Gremach will hold a 40 per cent stake and mining Coal in Mozambique.
Huge FII interest
The Gremach Infra stock has been lapped up by FIIs, with UBS A/c Swiss Finance Corporation holding a 5.6 per cent stake, Merrill Lynch with a 7.89 per cent stake, Lehman Brothers with 3.2 per cent, Franklin Templeton with 9 per cent and JM Financial with another 1.3 per cent. This brings institutional holdings in the stock at roughly 27 per cent, and there could be room for more as Gremach’s planned implementation becomes visible.
Prospecting For Crude
Gremach proposes to acquire 40 nos oil & gas drilling rigs, 36 on-shore and 4 off-shore in a period of 3 to 4 yrs at an approximate cost of $ 1 Bn. Gremach has tied-up with Baoiji Oilfield Machinery Company (Bomco), owned by China National Petroleum Corporation (CNPC) for design and manufacture of 4, 2000 HP VFD Oil & Gas Drilling Rigs. The contract is extendable to an additional 36 Rigs. If all goes well, Gremach and Bomco, may form a JV which will be listed on the Singapore Stock Exchange, with Bomco holding a 8 per cent stake in the Singapore SPV named Petrogrema Energy Pte Ltd.
The Oil Drilling business is considered highly profitable, with projected IRR of 35 per cent, the pay-back period works out roughly 3 years. Rig rentals per day, for Off-Shore Rigs have risen by 13 per cent in 2007 averaging around $ 3 to $ 5 lac per day.
Playing for Coal
Gremach has recently acquired a 75 per cent stake in a Mozambique based Company having 11 prospecting licenses of Coal, aggregating an area of 13520 Hectares, in the prime region of Moatize. This region falls in the Karoo basin which is recognized as a Prime Hard Coking Coal bearing area in Africa. Expected reserves in the prospecting area are estimated at more than 200 million tonnes and the first two mines could become operational by mid 2008. The 11 Coal Blocks acquired by Gremach, are very close to the prime Coal producing blocks owned by Companhia Vale do Rio Doce (CVRD).
With Natural Resources getting scarce JSW group, Ispat Industries and Tata Steel have recently made acquisition of coal mines in Mozambique. Incidentally, Tata Steel acquired a 35 percent stake in the Australian firm Riversdale Mining, which has a Coal Project in Mozambique for Australian $ 100 million (about $85 million). Companhia Vale do Rio Doce (CVRD), the world's largest iron ore producer is investing $2 billion in Mozqmbique thereby developing the Southern Hemisphere's biggest mines for Coal.
Listing Group Company and setting up a Metal SEZ
The Company's group Company Austral Coke & Projects Ltd.which manufactures Low Ash Met Coke may get listed in 2008, unlocking value for the shareholders of Gremach. Completing the bouquet of offerings Gremach would be setting up a Metal SEZ in Distt. Kolhapur of Maharashtra. Gremach has already acquired about 200 acres of Land wherein it would be be setting up its own API grade Spiral welded Pipe (Saw Pipe) plant costing about Rs 250 crore.
Summation
Once completed, Gremach would have graduated from being a construction equipment lending concern to one that owns Oil Rigs, Coal Mines in Mozambique, a SAW Pipe plant and a Metal SEZ in Maharashtra.