Mumbai: India’s largest private sector shipbuilder ABG Shipyard is in talks with local and overseas companies to divest 50% of its equity in favour of a strategic partner.
“We will bring this entity into the business by mid-August this year, as an equal partner,” said ABG’s chief financial officer Dhananjay Datar
The financially ailing flagship company of the Mumbai-based ABG Group is presently in the midst of a INR110bn ($1.76bn) corporate debt restructuring programme, under which a 22-lender consortium led by ICICI Bank has agreed to re-cast loans and give the company an extension of the repayment period, reduced borrowing cost and up to two years’ breathing time on interest payment.
Another private sector shipyard in financial trouble, Pipavav Defence & Offshore Engineering (PDOE), was recently acquired by Reliance Infrastructure, part of the Anil Ambani group, though the latter has yet to take over the management of the company.
PDOE is facing a stiff financial penalty (understood to be in the region of INR1.25bn) from the Indian Navy over inordinate delay in executing a INR25bn project for building five naval offshore patrol vessels, that was signed in 2011.
Due to a number of reasons, including a midterm change in the foreign design partner, the first of these vessels will only be ready for delivery in June 2016, instead of the originally planned December 2014.