Reliance Industries eying 26% stake in Pipavav Shipyard

Mukesh Ambani-owned Reliance Industries (RIL) may pick up a 26% stake in Pipavav Shipyard (PSL), India’s largest integrated shipyard with an exposure to offshore structures for oil & gas structures.

“We will issue a 26% fresh equity to the strategic investor,” SKIL Infrastructure chairman Nikhil Gandhi said. SKIL, the promoter of Pipavav Shipyard, holds a 39.5% stake in the company.

The acquirer will also make an open offer to the public at the same price after the deal is closed. An RIL spokesperson said that the company does not comment on market speculations.

Market sources said that RIL is the strategic investor. But Mr Gandhi declined to confirm that RIL is the potential investor. “The potential strategic partner could be a major national or international player from the oil & gas sector,” Mr Gandhi told ET.

He said that other investors have full confidence in his decisions and he would take them on board after the contours of the deal is finalised. “They invest in my vision,” he said.

The non-promoter shareholding in Pipavav Shipyard is 60.44%, out of which, 43% is owned by domestic and foreign institutional investors. Major investors include Trinity Capital (6.89%), New York Life Investment Management India Fund II (4%), Citadel (3.45%) and IL&FS (5.35%).

In March 2010, SKIL Infrastructure Group had bought a 19.6% stake from Punj Lloyd, the other major shareholder, through a negotiated deal at Rs 49.80 per share. Subsequently, it gave an open offer to public for 20% which received weak response.

The company’s stock closed at Rs 100.15, down by 0.10%, on the Bombay Stock Exchange (BSE) on Thursday. The company’s share price touched a 52-week high of Rs 103.40 on Wednesday. The scrip had touched a low of Rs 47.65 in October 2009.
The company has recently bagged an order amounting Rs 2,600-crore to build offshore patrol vessels for the Indian Navy. The deal is to construct about five patrol vessels, each with a displacement of about 2,000 tonne. Pipavav Shipyard has an order book of about Rs 4,500 crore.



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