ABG Shipyard gets two bidders, but not for shares

Seeking to recover their loans worth about Rs 17,000 crore, lenders of debt-laden ABG Shipyard have put the company on the block but none of the bidders appear to be interested in buying the shares.
The consortium of about two dozen banks, led by ICICI Bank, has mandated SBI Caps for finding the buyer for their 51 per cent equity, which lenders got after conversion of debt, which is believed to have attracted two expressions of interest (EoIs) -- from Liberty House Group of the UK and Reliance Defence and Engineering.
While an RDEL spokesperson did not comment on the matter, sources said the company has shown interest in an 'asset purchase agreement' for certain "agreed assets" of ABG Shipyard, but it is not interested in buying shares of the lenders or of the promoters.

Sources further said that Liberty House has offered to take over the existing debt of about Rs 16,000-17,000 crore of the company in lieu of the entire assets of the company. Liberty House could not be contacted for their comments.
ABG Shipyard yesterday said in a regulatory filing that the lenders have shortlisted few "prospective bidders" for the company after invoking their rights to change the ownership and its board has authorised a few top officials, including Chairman Rishi Agarwal, to take necessary steps with respect to the proposed transaction.
Sources said that neither of the two prospective bidders have shown interest in acquiring the shares of the lenders, or that of the promoters and failure to strike a deal may lead to the company exploring other options.

The lenders have been trying for a long time to recover their loans, including through Corporate and Strategic Debt Restructuring routes.

Besides Agarwal, company's executive director S Muthuswamy and CFO Hasmukh Daftary have also been authorised to "initiate all the necessary steps, deal with, modify, alter, amend, finalise and execute any agreements".
These would be in connection with the lenders and the company identifying and engaging with the prospective bidders for the proposed transaction, the company has said.
In view of the financial challenges faced by the company, the lenders to the company in meetings of joint lenders forum had decided to invoke the rights of the lenders to change the ownership of the company or to acquire assets and liabilities.

Lenders had acquired majority stake in the company upon converting part of their debt into equity under SDR scheme.
ICICI Bank had acquired the highest 11.08 per cent stake in the company in October last year by exercising its option to convert CCPS into equity. The consortium of lenders had also restructured their loan in 2013 under CDR scheme.
In August last year, the company's board had also approved the SDR invoked by its lenders. The lenders also include SBI, Dena Bank, PNB and IDBI Bank.
Incorporated in 1985, ABG Shipyard is the flagship company of ABG group with interests in shipping and cement sectors and manufactures ships and rigs across two facilities in Gujarat at Dahej and Surat.

It is one of the three private shipyards in India approved by the Indian Navy to build various types of naval vessels and has built 23 vessels for Indian defence sector.