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Debt-ridden Bharati Ship scouts for financial investors

Monday, 26 May 2014 - 7:10am IST | Place: Mumbai | Agency: DNA
Private ship builder sells non-core asset of wind farm to Kolhapur-based Ghadge Patil Group for Rs 55 cr

The debt-laden Bharati Shipyard Ltd (BSL), which is currently undergoing corporate debt restructuring (CDR), may soon get an equity investor on board.

Some interested parties including leading shipyards from the domestic market as well as foreign countries have already approached Alvarez & Marsal (A&M), an international management consultant appointed by SBI-led lenders for turning around the second-largest private shipbuilder.

"Lenders are okay with the idea of bringing in an equity investor, and the consultant is already on the job. Some people have shown interest in picking up equity in company since it has a viable plan in place for a quick turnaround," said people who are privy to the development, without divulging names of interested parties.

An official, however, said that the promoters and lenders are opposed to selling stake at current market valuations.

When contacted by dna, A&M's Nikhil Shah, who is acting as chief restructuring officer at BSL, refused to comment. Efforts to talk to PC Kapoor, managing director, were futile.

With lenders' approval, BSL is selling non-core assets to reduce the overall debt. It has already sold wind turbine generators at its wind farm located at Brahmanvel in Dhule (Maharashtra) for Rs 55 crore to Kolhapur-based Ghadge Patil Group.

The BSL stock has been hitting upper circuit ever since its EGM on May 21 approved enhancing the borrowing limit to Rs 20,000 crore from the existing Rs 7,000 crore, as reported by dna on April 23.

The additional borrowing limit will help lenders to invest another Rs 3,000 crore in BSL in fresh loan – which includes working capital requirement as well as advance payment guarantees.

"The fresh loan is likely to be available by May-end. This will help BSL start work on several pending orders for ship building," said a senior BSL official, adding the company was facing a severe cash crunch for executing orders.

On Friday, BSL stock was locked in the upper circuit at Rs 35 per share, up 5%, on BSE.

"BSL has half-a-dozen state-of-the-art shipyards that are currently running at a paltry 10% capacity because of lack of funds." Its shipyards are at Ratnagiri, Dabhol, Mumbai (in Maharashtra), Mangalore, Kolkata and Goa.

The company is promoted by two qualified naval architects from IIT Kharagpur, PC Kapoor and Vijay Kumar, having a vast experience in ship design and ship construction.




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