The Cabinet Committee on Economic Affairs (CCEA) at its meeting chaired by Prime Minister Narendra Modi on Wednesday approved Rs.33,984 crore initial public offer (IPO) by Cochin Shipyard Ltd. (CSL).
The CCEA's approval is for issue of 3,39,84,000 shares of Rs.10 each, out of which fresh issue would be 2,26,56,000 shares and sale of the central government's holding in the company to the tune of 1,13,28,000 shares, a CCEA statement said.
The proceeds of the fresh share issue will be used to part-finance the following areas for expansion in short and medium term: (I) Setting up of an international ship-repair facility (ISRF) at Cochin Port Trust area; and (II) Setting up of a large dry dock within the CSL premises to take up construction of larger ships such as large sized aircraft- and crude carriers.
The money will also be used to take up underwater repairs to rigs and semi submersibles.
The disinvestment of the central government's stake in CSL is in line with the government's decision on the issue. It will raise resources for the government due to the sound financial condition of CSL, the statement added.