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Visit http://indiaer.blogspot.com/ for complete details �� ��
Company Update
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Aban Offshore
Reco: ACCUMULATE
CMP: Rs 440
Target Price: Rs 485
Bond redemption comes at a steep cost
· Aban redeems bonds worth $160 mn - financed through internal accruals (USD40 mn) & fresh bond issue (USD120mn) Coupon rate at 12% significantly higher than estimates of 9%
· Aban’s next repayment obligation of USD157 due in Mar-12 could also be on similar lines – Downgrade FY13 EPS by 11.4%
· Though Aban boasts of contracted revenue backlog of ~$1.9 bn over FY12-15E, revenue visibility stands at 65% for FY13 as 6 jack up rigs are due for contrat renewal in H2FY13
· Lower target to Rs485 (Rs522 earlier) led by the earnings downgrade. We also lower rating from BUY to ACCUMULATE led by sharp 30%+ run up in the stock price
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