ABG has short-listed Hong Kong, Singapore, New York and London for hosting the road shows and would list the placements in any one of these cities.
Will expand Vipul facility to enable building of large ships
MUMBAI: ABG Shipyard Ltd, the largest private sector shipyard in the country, is raising Rs 800 crore through qualified institutional placements (QIP) to fund plans to double capacity at its Surat facility.
ABG has short-listed Hong Kong, Singapore, New York and London for hosting the road shows and would list the placements in any one of these cities.
Rishi Agarwal, managing director, ABG, said, “We would first evaluate the response from banks, which has been overwhelming so far, and then decide.”
The QIP would dilute the company’s equity by about 7-8% from the current 57%.
However, Agarwal added that there are warrants that have been issued to ABG — so the promoter’s stake would be upwards of 51% later. The private placement is
expected to close by February this year.
ABG plans to use Rs 400 crore of the funds raised through QIPs to facilitate expansion of the Surat facility. It proposes to convert the recently-acquired Vipul Shipyard, situated next to the ABG’s Surat facility, into a block building segment. ABG will build ship blocks at the expanded Vipul facility and assemble them at its existing yard.
The Surat plant will thus have more spaces (additional berths) to assemble blocks, increasing the capacity by about two-and-a-half times.
“This means that, at a low cost of Rs 400 crore, we would be able to more than double our capacity,” Rishi added.
The company expects to start the new block building operations in less than a year.
ABG plans to expand the acquired Vipul facility to enable building of very large ships. The proposed capex for this is Rs 800 crore. The company will fund it through internal accruals and the remaining QIP money (Rs 400 crore).
“In this new shipyard, we can build almost any ship, but we will concentrate on building Capesize, Suezmax and Bulker’s ships,” Rishi added. A standard Capesize bulk carriers can carry 1,80,000 tonnes of cargo.
The company released its third-quarter results on Monday. It posted a profit of Rs 47 crore, up 55% from last fiscal, backed by huge repeat orders. The ABG Shipyard stock closed at Rs 933.85 on on Tuesday.
s_archana23@dnaindia.net
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