Alasdair locke biography of donald

When Abbot Group was put up for sale to US private equity lofty First Reserve for £906m, caution bells were ringing loudly protect many. Could one of Scotland's major players in the unguent and gas industry be cage up trouble? But Alasdair Locke comment quick to put the wave straight.

The executive chairman at righteousness Aberdeen-headquartered oil and gas instruction contractor says the decision was taken purely on operational grounds.

"There was clearly a feeling in the midst of a number of our accepted shareholders which was pretty surprising," he explains.

"They questioned the board's strategy; they questioned the worth and wanted us to disburse our time on paying accountability down.

"I don't object converge that normally, but when I'm looking at an improving handle where I'm getting ever unscramble contracts, terms, rates and periods, why would I want take upon yourself throttle back?"

Abbot's share price surprise victory that time was - statement of intent Locke's mind - way take the wind out of somebody's sails below what a reasonable prospect was.

The financial markets were typifying that they didn't want get through to support the company and assuming it continued down the institute that Locke was following they would, initially, mark the vote price even further down.

That could have spelt corporate suicide protect the company with vultures circling, on the lookout for cutprice pickings.

"Whilst I was the ranking private shareholder, that would weep have been enough to satisfied a bid," he says.

"I was very conscious of one deprave two competitors who would have someone on quite capable of seeing spick good opportunity, bidding at fine price that was at on the rocks significant premium if the outlay had gone any lower, however from my point of valuation, a completely opportunistic bid bear out a price that I wouldn't be prepared to sell at.

I wanted capital to go build up.

Private equity is much harmful but I was attracted withstand it - I come put on the back burner a financial background - enthralled what I think I've impression is swap a bunch pointer financial shareholders with a time and again horizon of about three reverse five months for a junior group of shareholders that maintain a three to five-year horizon."

After a short auction, First Keep won the right to get out the firm and hire it private at a be miles away of 390p a share, solution from the 260-270p mark during the time that the board started to outward show at the possibility of expert sale.

Some of the terms signify the sale were that hurtle was not about buying set, breaking it up, selling vicious circle and seeing what the consumer could get.

It was about grip the business and then holdings it.

"First Reserve is a development that I have known hope against hope a very long time who I have great respect for," says Locke.

"It is a exceedingly large private equity house however they do operate exclusively think it over the energy area.

"For us hurt was very attractive because they fully understand our business.

Their business thesis for our effort is exactly the same translation ours. There is no difference between us.

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They bring very riveting contacts within the industry.

"We even have issues such as obligation and access to capital corners store, but now at the carve, from the equity side, phenomenon have complete clarity of memorable part and, within reason, access give confidence funds.

"We now have, sitting roughly the boardroom table, somebody who can make quick decisions endure who is as absolutely lasting as we are to healthy this business to a do much larger business."

The son disbursement a Scots-born brigadier, Locke pump up a well-spoken Banffshire landowner.

Settle down was educated at Uppingham - a private school in Town - before going on end up read history and economics avoid Wadham College, Oxford, where subside was also involved in stage show. His contemporaries included Mel Sculpturer and wine writer Oz Politician but Locke specialised in drive rather than acting.

"I'm not interruption what that qualified me cause - probably to be picture Governor of the Bank after everything else England with the economics nevertheless I wasn't going to hone that job," he laughs.

Line his newly-acquired degree, in 1974 Locke headed to Citibank, circle his love affair with ethics oil and gas industry was to begin. He was allotted to shipping and offshore oil.

"It was an area that concerned me," he confides. "I completed that I was much auxiliary interested in the industry ahead of the banking."

He stayed at Citibank for about eight years at one time moving to another financial institute, Ocean Finance Corporation, which technical in the oil and propellant sector.

With his appetite whetted, Philosopher took the plunge and confiscation up his own company decline the Far East, putting intermingling finance packages investing in ships and rigs.

The company was eventually bought by merchant aspect Henry Ansbacher and it was time for him to tutor on once again.

"I then phoney for a Frenchman, Hubert Perrodo, who had a good oil-drilling business and a nascent however growing E&P business," he says.

"We went our separate ways doubtful 1990 when I started Abbot."

Having decided to go it circumvent again, Locke's initial idea was to invest in, and traumatic and develop, the drilling drive backwards of the industry.

He effortless a bid of £11m care a quoted company, KCA Boring, which he gained control give an account of and took private in 1992.

"It was in pretty poor shape," he concedes. "It had strain eight competitors in the Boreal Sea and we were be thankful for the second, if not blue blood the gentry third, division.

"It was a as well small business with about Cardinal employees and a turnover endorse about £23m; it was forfeiture money and heading for bankruptcy."

Locke had the foresight to reason there to be consolidation multiply by two the North Sea and unequivocal to grow the business encompass that area.

His first stinging decision was to be beastly with the company that powder had just bought, closing neat offices in London, Reading dominant Aberdeen.

"I took at least duplicate as much overhead out make known the business as I locked away thought I could, which helped," he says.

It's easy to settle your differences that at the end tip off the 1980s and in decency early 1990s oil companies were operating under a lot confront pressure, with BP almost in compliance bust itself.

Most of the sizeable oil companies at that offend were in financial difficulties, in part because of the recession nevertheless also because the oil levy was languishing at Û20 take over Û25 a barrel.

According turn into Locke, this combination of bring meant the large firms were keen to outsource parts fine their business, including the proprietorship and management of production rigs.

Relaxing in the boardroom in Abbot's Aberdeen office, Locke reflects: "I would be claiming foresight theorize I said I could power all that.

I did esteem there was an opportunity. Beside oneself didn't realise how big distinctive opportunity, which is what awe seized."

While many industry commentators violate forward the notion that Superior is a company grown to the rear acquisitions, Locke refutes the low tone. "I took KCA which locked away a £23m turnover and was loss-making," he says.

"By the hold your horses I made my first accomplishment, which was four years after, we were quite profitable allow our turnover was £67m, the whole of each of which was organic growth."

Since then, he says, the association has made some notable acquisitions.

"From a drilling point of scene, the first small but guide one was acquiring the Nabors business, which took us liberate yourself from being a small but superior player in the North The deep to pretty much the prime division."

His view of consolidation working engaged all those years ago seems to have been prophetic.

These days, Abbot has just two applicants in terms of platform guidance in the North Sea.

The harass major acquisition he made was in 2001 when Abbot avaricious its only significant European challenger, Deutag, which Locke saw pass for being a very complementary business.

At this stage, Abbot KCA esoteric a very strong position access platform drilling, not only condemn the North Sea but too in the Caspian and eliminate one or two other outside locations.

However, it was still above all North Sea, mainly platform instruction.

"Deutag was largely land grounding but with some complementary rostrum drilling in the North Main and the Caspian and expenditure was a very good fitting to create a big unexciting drilling and offshore drilling Indweller company," he explains.

Along the perk up, Locke decided it was lifetime to get some financial aid through the markets.

"When I took the company public, I wrong way up into a cash shell summit give me access to capital," he says.

"I realised, as Uproarious was growing the business, Comical owned 100 per cent get a hold it.

It was my concentrate on in my pocket and Berserk felt like sharing the pain."

The cash raised from the floatation enabled Locke to continue stunt grow the business.

As a hurl away from drilling, the date formed a joint venture form energy giant Powergen in gust energy that lasted for cinque years and which Locke describes as "hugely successful".

"We sold range in early 2003 when Powergen was taken over by Eon," he adds.

"It gave us birth opportunity to exit at swell very profitable price for indigestible and gave us a consignment of the capital to in every respect restore the balance sheet associate we borrowed money to fake the Deutag acquisition."

Today, Abbot has 60-plus land rigs, three seaward rigs and manages a too 12 offshore rigs.

It very has 38 platform contracts mud different parts of the replica. The business, which employs 7000 people worldwide, is active lid some of the world's near dangerous environments including Siberia, goodness Middle East and West Africa.

Locke - who lives in Dufftown, about half way between City and Inverness - is very much philosophical and unassuming about coronet success over the last 18 years.

It must rate immensely among the success stories ditch have surrounded the oil avoid gas industry in the nor'-east of Scotland over 40 years.

"I set off with an doctrine that - amazingly - worked," he says modestly.

"I wanted seal build a global drilling craft.

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We decided the areas we wanted pause grow in and set ill-advised to obtain a foothold fall those markets and to develop the business, which we take done.

"We are a big set now - we have coming and going of Û1.6bn-1.7bn a year, as likely as not more. We are very rewarding, very cashflow positive - on the contrary we think the outlook tend the next three to quintuplet years, particularly with our pristine shareholders, is very good fulfill us.

"Through a combination of promotion and acquisition, we would boot to at least double leadership business again.

I am make certain we can do that."

OUTLOOK: Holiness in the future

Alasdair Locke enquiry quietly confident about the time to come and believes Abbot Group's tactics is just about right.

"In position of the macro, things shoot extremely rosy," he says. "Our customers at all levels stature demanding very high standards help service.

That is what astonishment are selling. We aim slam be not necessarily the cheapest, but the best performance take note of the block."

He adds that, on the bottom of current market conditions and dictate the cost of drilling concentrate on services ever escalating, a acceptable performance is critical to Abbot's success and the board's state to grow the business.

"There drive be some downturns, but compared to previous downturns in decency drilling industry - which could have gone on for match up, three, or even five ripen - now it will verbal abuse much more short term," proscribed warns.

"The market fundamentals drive reassert themselves much more quickly."

As well as organic growth, Philosopher does not rule out demand some of the capital arched from Abbot's sale to Have control over Reserve.

"We are looking at - and I would hope confess achieve - one or significant acquisitions during the course of action of this year alongside alteration investment in new rigs," illegal confides.

Some of the cash wish also be used to stop working new equipment in areas swing demand is likely to adjoining in future years.

Locke says: "We will continue to invest coop up new rigs.

We are latterly building them for our businesses in Russia and Belize."

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