Company plans to raise Rs 500-550 crore through IPO this month
While almost all industries across the globe have been hit hard by global recession, ship building industry is no exception. Gujarat-based Pipavav Shipyard, promoted by SKIL and Grevek Investments is re-negotiating price component in orders for eight vessels placed by its overseas customers. Apart from this, four orders for ships are under arbitration.
The company currently has orders for 22 Panamax size vessels and 12 offshore supply vessels (OSVs) from ONGC. "In the wake changing market conditions, our customers are re-negotiating orders for eight vessels out of 22 Panamax vessels, while order four vessels are under arbitration due to differences of opinions," said Bhavesh Gandhi, executive vice chairman, Pipavav Shipyard in a press conference at company's ship building facility.
"However, re-negotiation does not mean cancellation of the orders. We are working toward creating a win-win situation for both the company and its customers," he added. Typically, Panamax size vessel costs around US$ 35-40 million (Rs 170-190 crore approx.).
The company has firmed up plans to take up second phase of its expansion at Pipavav of Amreli District in Gujarat. The first phase saw commencement of shipyard, which is one of the largest in the world.
It has already acquired 491 acre land for its proposed plans to commission facility to build vessels up to four million DWT and phase two expansion.
Pipavav Shipyard aims to mop up Rs 500 to Rs 550 crore through its initial public offer (IPO), which is likely to hit the market this month. The company intends to utilise proceeds of the public issue for the first phase of expansion, the total cost of which is around Rs 2,950 crore. The company has already spent Rs 2,100 crore for this project.
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Pipavav Shipyard also has the option of Anchor Investor Scheme and it is in talks with many anchor investors. The company, currently, has orders for a total 22 Panamax size vessels and 12 offshore supply vessels (OSVs) from ONGC. Defence vessels is yet another area, which the company is aggressively looking at. It has already submitted bids for seven naval vessels including five naval offshore patrol vessels and two cadet training ships.
The company further has plans to raise its headcount to 2,000 from current 972. Apart from this, the company has also adopted two ITIs located at Rajula and Mahuva areas in Gujarat.
Pipavav Shipyard has commenced the construction of four Panamax bulk carriers, the first of which is expected to be delivered in April 2010, which subsequent deliveries likely to take place in one to three months intervals thereafter.