Alpha Geo - up for sale or not? Ask Dinesh...

Vol 20, PW 18 (01 Jun 17) People & Policy

Widespread speculation that Hyderabad-based seismic contractor Alpha Geo is for sale has come as a surprise to ONGC director exploration AK Dwivedi, who awarded the company a significant 2D job last year (2016).

"Is he (Alpha Geo managing director Dinesh Alla) really selling the company?" asks Dwivedi. "I didn't know that!" Dwivedi adds that ONGC is so far happy with Alpha Geo's progress on the Rs1482cr ($229m) contract to shoot 26,905-lkm 2D over unexplored areas of Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, Himachal Pradesh, Kashmir and Uttarakhand.

"There were some contractual problems initially," adds Dwivedi. "But now things are fine.

Our contracts have provisions to safeguard our interests. Whoever buys the contractor (Alpha Geo) can complete the work." Rumours of an imminent sale began circulating after Alpha Geo promoters led by managing director Alla increased their equity from 41% to 43.3% over January to March 2017.

"The company issued 730,000 warrants to the promoters at the rate of Rs503 ($8) each," we hear. "Before this transaction, the promoters held 41% shares.

They converted 210,000 warrants into shares in the last quarter following which their equity has gone up to 43.3%." More, the promoters have an option to convert the remaining 500,000 warrants to shares, taking their shareholding to 46.6%. "Looks like the promoters are consolidating their shareholding before a sale."