ABG Shipyard jumps on reports lenders may take over if Privinvest deal fails

ABG Shipyard rose 3.57% to Rs 139.30 at 12:25 IST on BSE on reports the company's lenders are mulling taking over the firm if its deal with Privinvest Holding Sal fails.

Meanwhile, the BSE Sensex was up 449.53 points, or 1.78%, to 25,767.40.

On BSE, so far 80,000 shares were traded in the counter, compared with an average volume of 2.15 lakh shares in the past one quarter.

The stock hit a high of Rs 144 and a low of Rs 136.10 so far during the day. The stock hit a 52-week high of Rs 273 on 15 September 2014. The stock hit a 52-week low of Rs 127 on 24 August 2015.

The stock had underperformed the market over the past one month till 8 September 2015, falling 25.09% compared with 10.34% fall in the Sensex. The scrip had also underperformed the market in past one quarter, falling 12.92% as against Sensex's 4.54% decline.

The small-cap company has an equity capital of Rs 53.91 crore. Face value per share is Rs 10.

ABG Shipyard clarified on 12 June 2015 that it had received firm expression of interest from Privinvest Holding Sal to buy a stake in the company. The clarification followed media reports, which suggested that the promoters of cash-strapped ABG Shipyard were close to selling a controlling stake in the company to Beirut headquartered Privinvest Holding SAL, a manufacturer of naval and commercial vessels. Promoters held 55.71% stake in ABG Shipyard (as on 30 June 2015).

According to latest media reports, the lenders of ABG Shipyard are mulling taking over the company if its deal with Privinvest Holding Sal falls through.

Reports suggested that ABG Shipyard's Rs 11,000-crore debt restructuring package was cleared in March 2014 by a consortium of 22 lenders under corporate debt restructuring (CDR). However, last month, the company failed to make payments to some of the banks, including ICICI Bank, Development Credit Bank and Punjab National Bank, which led to these banks classifying it as a non-performing asset (NPA) or a bad loan.

Among banks, ICICI Bank has the highest exposure to ABG Shipyard. It stands at Rs 2600 crore, followed by State Bank of India at Rs 1600 crore, IDBI at Rs 1400 crore, Punjab National Bank at Rs 700 crore and Exim Bank at Rs 700 crore, reports added.

Earlier, media reports suggested that Privinvest is likely to buy up to 49% stake in ABG through fresh issuance of shares. This will trigger an open offer for an additional 25% of equity. If fully subscribed to, then Privinvest could end up owning as much as 74% of the company.

ABG Shipyard reported net loss of Rs 249.62 crore in Q1 June 2015 as against net loss of Rs 55.58 crore in Q1 June 2014. Net sales declined 92.09% to Rs 20.88 crore in Q1 June 2015 over Q1 June 2014.

ABG Shipyard is the largest private sector shipbuilding yard in India.

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