ADES International (ADES) has loaded up on debt and doubled its rig count in the past year, betting on an improving oil and gas sector in the Middle East. This month, the company borrowed another $144m (£107m), doubling the amount owed to Saudi Arabian bank Alinma, with no explanation beyond "enhancing" its cash position.
IC TIP:
Sell
at
$$14
Last month, ADES also closed a $325m offering of bonds yielding 8.6 per cent, which are due to mature in 2024, “for debt refinancing purposes”. The company’s net debt has soared due to acquisitions, climbing almost fivefold in the 12 months to 31 Decembe, 2018, to $424m. The largest of these purchases was 31 rigs from Weatherford International for $287.5m.
