Monday, November 29, 1999

Pipavav to divest 26% to strategic investor

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Nikhil Gandhi co-promoted Pipavav Shipyard is looking to selling 26% stake in the company to a strategic investor. "We, as a group, have always been focused on creating value for our stakeholders. We are in talks with a few big names in the industry and if everything goes well we will be announcing a deal in one or two months," said Gandhi, the company's chairman.SKIL Infrastructure, which is into developing ports, shipyards, railway lines, expressways and special economic zones (SEZ), currently holds around 39.93% stake in Pipavav. It is also the majority shareholder in Pipavav but is not looking at reducing its stake in the company."We are looking at a strategic partner who is well known in the industry and brings in lot of synergy within the company," he said.The company, as of March 2010 quarter, has a total 66.5 crore shares. Shares of the company on the Bombay Stock Exchange (BSE) closed at Rs 100.15, down 0.10%, on Thursday. A 26% stake dilution at current market prices would fetch the company around Rs 1,375 crore. However, Gandhi said the sale would be done at a premium amount, "so as to create value for shareholders."According to sector analysts, the move to induct a strategic investor is a positive one for the company. "More than money, Pipavav needs a partner who is well versed with the heavy engineering sector. Punj Lloyd was a technology partner for them and their exit has left them without any experience in the heavy engineering section of shipbuilding," said an analyst. "Also the company has faced order delays and order cancellations in the past," the analyst added.In March 2010, Punj Lloyd sold its 19.43% stake in the company to SKIL Infrastructure in a deal worth Rs 650 crore. SKIL Infrastructure is expected to come out with an initial public offer (IPO) by the end of this calender year to raise about Rs 1,500 crore. Through the IPO, SKIL plans to dilute upto 10% of its promoters stake from the current holding of 94% in the company.

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