ABG Shipyard on the lookout for white knight

Mumbai: The Ahmedabad-based Adani Group, the Mahindra Group and a couple of overseas institutional investors, including one from Singapore, are understood to have been approached by the cash-strapped ABG Group for a sale of a strategic stake in their flagship company, ABG Shipyard.

The company has been guilty of the same error made by another top Indian private sector shipbuilder, Bharati Shipyard – taking on far more debt than it could possibly service.

In March last year, its INR110bn ($1.75bn) corporate debt restructuring (CDR) proposal was cleared by a consortium of 22 lenders. But the company is now being urged to bring in a strategic investor or ‘white knight’.

Chairman Rishi Agarwal, whose family owns 62% of the shipyard’s equity, is even being pressurised into selling a controlling stake. However, most of these shares are already pledged with banks in the wake of the CDR exercise.

The company owns two shipbuilding facilities in Surat and Dahej, on the Gujarat coast, and a repair setup, Western India Shipyard, in Goa. It has, over the years, delivered around 160 vessels to both domestic and international clients, largely focusing on bulk carriers, offshore vessels and jack-up rigs.

Shirish Nadkarni

Shirish Nadkarni is a management consultant and freelance international journalist, who has been writing on all spheres of Indian business for the past three decades for a number of reputed overseas publications. An avid sportsman, Nadkarni has represented India in international veterans' badminton since 1997, and was the 55+ age group doubles world champion in 2005.
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