India's state-owned Cochin Shipyard Ltd (CSL) has started preliminary discussions to buy a controlling stake in debt-ridden ABG Shipyard Ltd, Livemint reported quoting un-named sources close to the development.
Earlier, three suitors - Reliance Defence, Shapoorji Pallonji Group and the UK’s Liberty House - have shown interest in buying ABG, even as its lenders try to force the ship maker out of a debt recast mechanism and recover their dues. However, sources say that they have backed out one by one.
Now that Shapoorji Pallonji and Co. Ltd has decided to back out of the discussion, CSL entered the fray. ABG Shipyard’s lenders have been in talks with several strategic investors for a while.
A controlling stake in ABG may be valued at Rs400-500 crore, the second of the two people said. In the March quarter of 2016, the company had posted a loss of Rs1,710 crore and had an outstanding debt of Rs16,000 crore.
Incorporated in 1985, ABG Shipyard is the flagship company of ABG group with interests in shipping and cement sectors and manufactures ships and rigs across two facilities in Gujarat
at Dahej and Surat. It is one of the three private shipyards in India approved by the Indian Navy to build various types of naval vessels and has built 23 vessels for Indian defence sector.