Pipavav restructuring

Mumbai-based shipbuilder Pipavav Shipyard and Engineering (PSEL) is currently restructuring its capital basis by inviting overseas investors to take a stake in the company. The post-restructuring envisages that four financial investors will hold 40% equity in PSEL. The Nikhil Gandhi-promoted SKIL infrastructure, which floated Pipavav, will hold a 35% stake in PSEL while Indian financial institutions like IL&FS, IDBI and Exim Bank will hold the remaining 25%.

The shipyard, a part of which is already operational, has won $356 million worth of orders from European companies Frederiksson of Scandinavia and the French Bourbon for ten 75,000 DWT bulk carriers. “There is a firm order for 10 bulk carriers with slightly different specifications, and another eight options. If the options are turned into firm orders, it would be worth another $300 million,” said sources.

Afcons India has been awarded a Rs 330-crore contract to build a 600-metre long dry dock in Pipavav, which will be the third largest in the world after Hyundai yard in South Korea and Dubai Drydocks. PSEL is also developing over 700 acres of land in Pipavav for ship-building activities and will spend around Rs 1,000 crore over the next two years to build additional infrastructure.

The proposed shipyard, once completed, will be the largest in India and fifth largest in the world. Designed to handle ships of all sizes, the yard is expected to employ over 4,000 workers and be capable of constructing 12 large ships at the same time. Earlier, PSEL had bagged two deals worth $720 million to build ships for Z Schifenbau of Germany and BF Shipping of Cyprus. PSEL sources said the orders for pure car and truck carriers (PCTCs) are still being negotiated and is claimed to be the largest ship-building order in India.