Quippo Oil & Gas Infrastructure Ltd, a unit of Srei Infrastructure Finance Ltd, is in talks to buy the assets of GOL Offshore Ltd, two people familiar with the development said.

GOL Offshore is one of the largest offshore oilfield service providers in India, offering drilling and offshore support services to oil and gas firms for exploration and production activities. The firm, earlier known as Great Offshore Ltd, plans to sell some of its assets to meet repayment obligations.

Some of GOL Offshore’s lenders and foreign vendors had approached courts to recover loans and dues.

In December 2014, two state-run lenders—Exim Bank of India and Punjab National Bank—filed separate winding-up petitions in Bombay high court seeking to liquidate the company’s assets to recover loans.

In an emailed response, Srei’s chairman and managing director Hemant Kanoria said, “As a group, we always explore opportunities to grow our businesses across the infrastructure sector— both organically and through acquisitions. However, we do not comment on market speculations or reports suggesting possible transactions involving acquisitions or disposals.”

GOL Offshore did not reply to an email seeking comment but a company official, one of the two persons mentioned above, said: “Quippo is looking to acquire 5-6 select vessels of GOL Offshore including the Badrinath asset to enhance its portfolio.” This person requested anonymity.

GOL Offshore has three offshore drilling units—Kedarnath, Amarnath, and Badrinath—that it leases out to oil and gas firms.

As of March, its total consolidated debt was Rs.1,384.46 crore. The firm’s loss widened to Rs.693 crore in 2015-16 from Rs.170 crore the previous fiscal.

On 13 June, the Bombay high court allowed DVB Group Merchant Bank (Asia) Ltd, a unit of Germany’s DVB Bank SE, to seek bids for selling six ships of GOL Offshore and recover its outstanding loans. The court said the lender could publish public advertisements and notices for the sale of the six vessels—Malaviya 23, Malaviya 24, Malaviya 25, Malaviya 27, Malaviya 28 and Malaviya 9—after 24 June.

GOL Offshore Ltd was formed when the offshore division of Great Eastern Shipping Co. Ltd was spun off into a separate entity in October 2006. In 2009, Bharati Shipyard Ltd acquired a 14.89% stake in GOL Offshore after its founder Vijay Sheth forfeited shares pledged with Bharati Shipyard. Subsequently, Bharati Shipyard hiked its stake via an open offer and through negotiated deals.

In 2012, Bharati Shipyard was referred to the corporate debt restructuring (CDR) cell after it failed to service Rs.5,800 crore of loans. The CDR was unsuccessful, and in 2014, lenders sold a majority of their exposure in the company to Edelweiss Asset Reconstruction Co. Ltd.

Quippo says its primary focus is on providing state-of-the-art drilling rigs.

“We also have exploration and production aspirations and have already won an exploration block in NELP VII,” it said on its website. NELP is New Exploration Licensing Policy.

Since the drop in crude oil prices, which kicked in during the second half of 2014, oil and gas companies slashed capital expenditure impacting global rig demand. This led to an oversupply of rigs, slashing day rates.

“Hiring charges for vessels, rigs and barges are down. Earnings for oil services companies are down due to cheap rates,” said a senior official from a public sector exploration company on the condition of anonymity.

This has helped oil and gas companies such as the state-run Oil and Natural Gas Corp. Ltd cut operating expenditures by a much as 40%.