Privinvest May Buy Stake in ABG Shipyard
India's largest private shipbuilding company ABG Shipyard is in talks with Privinvest Holding SAL to sell stake. A report says that Privinvest is expected to acquire up to 49% stake in ABG.
A report in the ET NOW says both the companies entered into an exclusivity period for the transaction on May 29. Privinvest may get 3 board seats and new management to ABG Shipyard post the deal, says report.
Privinvest Holding which has shipbuilding operations across the world is interested in picking majority stake in ABG Shipyard not only to have a presence in India but to also gain from its defence licence to build warships.
This will be a much needed lifeline as ABG has been struggling to stay afloat a year after its Rs 11,000 crore ($1.8 bln) debt restructuring package was cleared by a consortium of 22 lenders under the corporate debt restructuring (CDR) mechanism.
Just last month, the company had missed payments to some banks which subsequently led to ICICI Bank and Development Credit Bank classifying the account as a bad loan, putting pressure on the rest of the banking system to follow suit.
In the first leg of transaction, Privinvest could be buying 25 per cent stake in ABG Shipyard via issuance of fresh equity. This will trigger an open offer for the shares of ABG Shipyard.
The Bombay Stock Exchange (BSE) has sought clarification from ABG Shipyard Ltd with reference to the news appeared in ET NOW, dated June 11, 2015 captioned "Germany based Privinvest to buy 49 % stake in ABG shipyard via fresh equity worth 1000 cr."
