OilMax acquisition of Asian 'mess' in final lap

Vol 19, PW 17 (05 May 16) People & Policy
     

Some are wondering if OilMax's deal to take a controlling stake in Asian Oilfield Services is fact or fiction.

OilMax was expected to sign the deal taking the 56.34% held by Samara Capital last month (April). But that didn't happen.

When contacted OilMax promoter Kapil Garg stresses he is not having second thoughts. "We haven't fixed a date to sign the deal," Garg told this report on April 25.

"These transactions take time." Garg unsurprisingly refused to share details of his talks with Samara. "Asian is a listed company," he said.

"We'll have to announce [the deal] when it is done. You'll know when that happens." A source close to OilMax says it wants to thoroughly check Asian's liabilities.

"Both sides [Samara and OilMax] are sending drafts of the agreement back and forth," he tells us. "Sometimes OilMax adds a line or two, sometimes Samara.

Kapil wants to make sure there are no surprises later." OilMax, he says, is gradually discovering Asian is a mess. "Not a single project [currently in hand] is profitable," we are told.

"We don't understand how the company was run." When asked why he is buying a potentially loss-making company, Garg laughed. "There is definitely a purpose," he said.

"We have a few things in mind." Asian's total debt including short term, long term and current liabilities is Rs25cr ($3.8m).