Bharati Shipyard may sell 15% stake to SCI

Bharati Shipyard plans to sell as much as 15 per cent equity to the country’s largest shipping company, Shipping Corporation of India (SCI). It will file an Expression of Interest for selling a minority stake to the state-owned company. At present, with a market capitalisation of Rs 636 crore, a 15 per cent stake sale would fetch the company Rs 95.4 crore.

Vijay Kumar, managing director of the Indian shipbuilder, confirmed the development in an interview in Singapore today. “We are interested and we have been discussing this with them for the last one year. We would like it to be part current shares and part new ones,” Kumar said.

Bharati is looking for funds to secure its business, which is still recovering from the economic slowdown. The company had acquired a 49.73 per cent stake in the Mumbai-based off-shore oilfield services firm, Great Offshore. The company reported a 41 per cent drop in net profit to Rs 22.13 crore for the first quarter ended June, compared to Rs 37.25 crore in the same period in the previous financial year.

SCI is looking for buying a minority stake in a shipyard as part of its plans for backward integration. “We will do our due diligence after receiving the Expression of Interest from companies, the last date for which is in October,” S Hajara, chairman, SCI, told Business Standard.

The corporation is in talks with several companies for a joint venture to set up a shipyard with a stake of up to 10 per cent.

SCI plans to come up with a follow-on public offer, for which it has got the board’s approval. The proposal is still awaiting the Cabinet’s nod.