Reliance Infrastructure (R-Infra), the new owner of Pipavav Defence and Offshore Engineering, on Thursday said it plans to exit the shipbuilding firm’s corporate debt restructuring (CDR) programme.
The company would be named Reliance Defence and Engineering by January 2016, R-Indra said. Lenders had approved the company’s recast package in March.
The process of acquisiton is being finalised and the open offer will open on December 2 and will close on December 15. “It is expected that the change of control, reconstitution of the Board of PDOC, and change of name of the company to Reliance Defence and
Engineering, will be completed in January 2016,” the company said.
Reliance Infrastructure explained that the exit from the CDR was expected to lead to improved financial flexibility and increased business opportunities for PDOC.
The corporate debt restructuring cell (CDR) has approved a R12,000-crore debt recast proposal for Pipavav Defence. The Mumbai-based shipbuilding firm reported a loss of R170 crore in Q2 FY16 on revenues of R54 crore. The company was also been sanctioned additional funding worth R4,500 crore.
The firm’s gross debt increased to R6,893 crore as of the end of March 2015 from R5,527 crore a year ago. Along with non-fund based bank guarantees of around R2,000 crore, the total exposure of banks to Pipavav is at R7,500 crore.
In a statement issued on March 4, R-Infra said it would follow up the initial 18% stake purchase with an open offer to acquire another 26% from shareholders at a value of R66 per share.
The company was among entrants into the CDR cell from the shipbuilding sector after ABG Shipyard and Bharti Shipyard. However, while ABG’s restructuring package worth Rs 11,000 crore is being implemented, Bharti Shipyard’s R3,500-crore loans were taken over by Edelweiss asset reconstruction company (ARC) in July last year.
The Mumbai-based company is promoted by Skil Infrastructure (34%), Skil Shipyard Holdings (5.21%) and Grevek Investment And Finance (3.04%), as on September 2015.
The stock closed at R64.05 on Thursday on the BSE, up 0.08% from its previous close. Pipavav was referred to the CDR cell by a joint lenders’ forum in January this year.
Corporate debt restructuring is a mechanism that works on the principle of approvals by super-majority of 75% creditors (by value) which makes it binding on the remaining 25% to agree to the majority decision and covers only multiple banking accounts and consortium accounts with exposure of R10 crore and above.
Smooth sailing
Process of acquisiton is being finalised and the open offer will open on December 2 and close on December 15.
Exit from CDR may lead to improved financial flexibility and increased business opportunities for Pipavav.
Corporate debt restructuring cell has approved a R12,000-cr debt recast plan for Pipavav Defence.
| Subscribe To Our Free Newsletter |
