 "Preparing a plan to exit profitably: Sameer Kaji & Siby Antony")
Last year, Edelweiss Asset Reconstruction Company had taken on the bulk of Bharati Shipyard's debt. In a telephonic interaction, Sameer Kaji, interim chief executive officer at Bharati, and Siby Antony, managing director and CEO at Edelweiss ARC, talk to Aditi Divekar on their plans. Edited excerpts:
Bharati Shipyard had plans to sell 12 of its 63 ship orders in the next 18-24 months, aiming at generating cash flow of at least Rs 1,200-1,300 crore. How will you do so in such a bad market, with even global shipbuilding companies making losses?
There is a bit of change from the earlier plan. We have now identified 21 vessels, five of which would be commercial vessels and the balance would be of the ministry of defense (MoD). For the latter, the ministry is the buyer and so, we do not have to go hunting for one. For commercial ships, we are in advanced talks with European companies. Delivery of MoD vessels would be complete in 18-24 months.
The market is dull but there is surely a buyer at reduced prices. The expected revenue for these 21 vessels would be in excess of Rs 1,300 crore or $200 million. We do not see it to be a major compromise on realisations.
By when do you see Edelweiss ARC exiting Bharati Shipyard?
The ARC can restructure the debt for a maximum of eight years. In the short to medium term, our objective is to stabilise the business, generate positive cash flow and revive the company. Alongside, a master plan is being worked out for better clarity on the exit time-frame and revival plans. It is will take a year for this plan to get ready. The underlying assumption would a win-win-win for lenders, company/promoters and the ARC.
Knowing that the yards are operational at the lowest levels and Bharati Shipyard is cash-dry, what is the scenario on disbursement of staff salaries?
The arrears for six-seven months before Edelweiss took over remain to be paid to the employees. The total is about Rs 15 crore. But, since the time Edelweiss has entered, salaries are being paid, by and large, regularly and we are also meeting all other critical payments.
When will employees receive their arrears? Also, there were winding-up petitions filed by some creditors against Bharati Shipyard in the Bombay High Court. What is the status?
We plan to pay the employees' arrears in the next 12-18 months. In the case of critical payments, we have no big payment to be made.
The amount related to creditors which have filed winding-up petitions is Rs 8-9 crore, which we plan to pay out in one year.
Bharati Shipyard had plans to sell 12 of its 63 ship orders in the next 18-24 months, aiming at generating cash flow of at least Rs 1,200-1,300 crore. How will you do so in such a bad market, with even global shipbuilding companies making losses?
There is a bit of change from the earlier plan. We have now identified 21 vessels, five of which would be commercial vessels and the balance would be of the ministry of defense (MoD). For the latter, the ministry is the buyer and so, we do not have to go hunting for one. For commercial ships, we are in advanced talks with European companies. Delivery of MoD vessels would be complete in 18-24 months.
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In the current weak market, will you get good deals? What are the realisations you are looking at from sale of these vessels?
The market is dull but there is surely a buyer at reduced prices. The expected revenue for these 21 vessels would be in excess of Rs 1,300 crore or $200 million. We do not see it to be a major compromise on realisations.
By when do you see Edelweiss ARC exiting Bharati Shipyard?
The ARC can restructure the debt for a maximum of eight years. In the short to medium term, our objective is to stabilise the business, generate positive cash flow and revive the company. Alongside, a master plan is being worked out for better clarity on the exit time-frame and revival plans. It is will take a year for this plan to get ready. The underlying assumption would a win-win-win for lenders, company/promoters and the ARC.
Knowing that the yards are operational at the lowest levels and Bharati Shipyard is cash-dry, what is the scenario on disbursement of staff salaries?
The arrears for six-seven months before Edelweiss took over remain to be paid to the employees. The total is about Rs 15 crore. But, since the time Edelweiss has entered, salaries are being paid, by and large, regularly and we are also meeting all other critical payments.
When will employees receive their arrears? Also, there were winding-up petitions filed by some creditors against Bharati Shipyard in the Bombay High Court. What is the status?
We plan to pay the employees' arrears in the next 12-18 months. In the case of critical payments, we have no big payment to be made.
The amount related to creditors which have filed winding-up petitions is Rs 8-9 crore, which we plan to pay out in one year.