L & T Shipbuilding Ltd’s shipyard at Kattupalli, North of Chennai, is scheduled to commence commercial operations in the current quarter ending December, according to rating and analysis agency – Crisil.L & T Shipbuilding is a joint venture, in which L & T holds 97% stake while Tamil Nadu Industrial Development Corporation Ltd holds the remaining. It was set up to develop a shipyard for the construction and repair of defense and commercial vessels along with a minor port with an annual container handling capacity of 1.2 million twenty foot equivalent units.
The total project cost of Rs. 3, 375 crore is being funded in a debt-to-equity ratio of 75:25. However, there has been an increase in the project cost by Rs. 614 crore due to widening of scope. The cost overrun was primarily funded by L & T in the form of equity. The company has already spent a sum of Rs. 349 crore and completed 95 per cent of the project as on June 30, said the Crisil report.
The Crisil report was part of assigning a “stable” rating to facilitate the shipbuilding company raise Rs. 2,531 crore via non-convertible debenture issue to repay its existing bank loan.
The parent company – Larsen & Toubro Ltd – has issued an unconditional and irrevocable guarantee to the NCD issue.
The refinance of debt through the NCD bond issue will help the shipbuilding company reduce its interest rate by 150-200 basis points, according to the equity analyst tracking the sector. The funds will be raised in two tranches of Rs. 1,200 crore and Rs. 1,300 crore with a tenure of five years and 15 years respectively.
The Kattupalli shipyard will be the third major international destination for ship repairs in the region after Colombo and Singapore. It will compete with Japanese and Korean shipyards in building “specialised ships,” such as large-size warships, car carriers, submarines, naval offshore patrol vessels, fast patrol vessels and corvettes.
The parent company’s Hazira campus also has a modular fabrication yard and shipyard, which currently executes shipbuilding orders.
During the recently concluded quarter of July-September, the parent company had announced orders worth Rs. 2,523 crore for shipbuilding segment out of the total orders of Rs. 17,187 crore received.
No comments:
Post a Comment