Bharati Shipyard mulls Rs 200-cr capex over two years

Bharati Shipyard is mulling a Rs 200-crore capital expenditure over the next two years, a top company official said.

"We are looking at a capital expenditure of Rs 200-crore for our expansion plans," Bharati Shipyard's Managing Director V Kumar told reporters on the sidelines of its annual general meeting (AGM) here today.

"We have received shareholders permission to increase the share capital of the company and we may raise the funds either through a QIP, rights issue or through some other instruments," Kumar said.

The company has acquired 22.48 per cent shares of Great Offshore.

The company has already made an open offer to acquire an additional 20 per cent stake in Great Offshore and expects Sebi nod for the open offer in 10 days, Bharati Shipyard's another Managing Director P C Kapoor said.

This is a strategic long-term investment and a significant step towards realising the company's aspiration of having a strong foothold in all spheres of the offshore industry. The investment would present long-term benefits for both Bharati Shipyard and Great Offshore, Kapoor said.

On the outlook for the shipping industry, Kumar said, FY09 had been an extremely challenging account of the difficult global scenario which saw massive order cancellations across the globe.

However, Bharati Shipyard did not face a single order cancellation, Kumar said, adding in fact, the company bagged new orders to the tune of Rs 699 crore during FY09, he said.

The company's order-book position stood at Rs 5,094 crore as on March 2009.

"We have bid for building interceptor boats for the Indian Coast Guard, Indian Navy and we have also bid for supplying offshore vessels to foreign clients," Kumar said.

The company, foraying into the defence market after a gap, has bagged a prestigious Rs 281 crore contract from the Ministry of Defence for the supply of 15 interceptor boats for the Indian Coast Guard.

The long-pending subsidy issue has hit the country's ship-building industry due to non-clarity on the subject, Kumar said.

As per the scheme launched in 2002, the government provided a 30 per cent subsidy on all ship sales to foreign companies and for vessels over 80-metres long sold in the local market. Only contracts entered into before August 14, 2007, are eligible for the subsidy claim.     

In order to promote the domestic shipbuilding industry, the government extended the subsidy scheme earlier meant only for state-owned compenies, to private shipbuilding companies.

Bharati Shipyard expects Rs 277-crore worth subsidy from the government by the end of this financial year.