ABG Shipyard to raise Rs. 1000 crs.

ABG Shipyard, the country’s largest private sector shipyard, may raise INR 1,000 crores to fund its expansion and working capital needs.

In a report to the shareholders, ABG Shipyard said the company would raise the money in one or more tranches through a public issue, a private placement or QIP. “Taking into account the performance and positive outlook of the company, the company proposes to raise long term capital by issue of further securities to cater to its fund requirements for expansion of activities, finance, additional working capital and general corporate purpose,” the report said.

ABG Shipyard has orders over INR 16,000 crores and debt of about INR 2,300 crores. Its expansion plans include setting up a shipyard in Nigeria. In 2010, ABG had acquired a controlling stake in the Goa-based Western India Shipyard and was an unsuccessful bidder in the public battle to gain control over Great Offshore.

The global economic downturn and the withdrawal of a special subsidy have affected the fortunes of the local shipbuilding industry. A recent Government proposal to allow defence shipyards to team up with the private sector companies is expected to boost revenue and orders though there is little clarity about the quantum of benefit.

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