ABG Shipyard hikes stake in Western Shipyard to 60.26%

India's largest private sector builder ABG Shipyard took control of the beleaguered Western Shipyard (WISL) on Friday by raising its stake to 60.26 per cent from 19.68 per cent. However, there were no details on the timing of the open offer.

The ABG scrip closed at Rs 311.10, down 0.67 per cent while WISL jumped nearly 20 per cent to Rs 16.76.
According to a Bombay Stock Exchange communiqué, ABG bought 11.9 crore shares from October 12-14. All shares were transferred from a group of financial institutions led by ICICI Bank. The others are IDBI Bank, State Bank of India, Bank of India and Industrial Investment Bank of India, all of whom jointly account for 43 per cent equity in WISL.
“By this acquisition of shares, ABG is fully committed to providing marketing and technical support to WISL to build quality order book,” said Mr Dhananjay Datar – CFO, ABG Shipyard.
According to sources, ABG will invest Rs 25 crore as its direct contribution and also arrange Rs 120 crore of debt to restructure the Rs 250-crore outstandings.
“WISL has now become an ABG Group Company. With its technical support, WISL will look forward to big and quality repair orders for both ships and rigs,” said Cdr. S.K. Mutreja – Whole Time Director & CEO of WISL.
“This is a strategic buy for us. It is the only specialised ship repair facility in the private sector,” said Mr Datar.
The WISL facility can repair ships of up to 60,000 tonnes capacity and accommodate (ships) up to 225m in length and 32.5m in breadth. It can also build ships.
ABG has been adding capacities by acquiring existing yards or building new ones to meet the growing demand in Indian yards. Incidentally, builders in South Korea, Japan and China do not entertain orders for relatively smaller ships.
ABG is investing about Rs 950 crore to build a new yard at Dahej, Gujarat. It has also agreed to buy Vipul Shipyard, its neighbour at Mag-dalla port in Surat.