Pipavav Defence jumps on debt restructuring buzz

Pipavav Defence & Offshore Engineering Company rose 4.94% to Rs 59.50 at 9:50 IST on BSE on reports that lenders have chosen the corporate debt restructuring route to restructure the company's debt of close to Rs 7000 crore.

Meanwhile, the BSE Sensex was down 46.61 points, or 0.17%, to 27,411.77.

On BSE, so far 11.70 lakh shares were traded in the counter, compared with an average volume of 6.94 lakh shares in the past one quarter.

The stock hit a high of Rs 60.80 and a low of Rs 57.30 so far during the day. The stock hit a 52-week high of Rs 73.90 on 6 June 2014. The stock hit a record low of Rs 30.55 on 4 February 2014.

The stock had outperformed the market over the past one month till 9 January 2015, rising 31.25% compared with 1.22% fall in the Sensex. The scrip had also outperformed the market in past one quarter, rising 44.64% as against Sensex's 3.08% rise.

The mid-cap company has an equity capital of Rs 736.21 crore. Face value per share is Rs 10.

According to reports, lenders to Pipavav Defence & Offshore Engineering, the country's largest shipbuilding and heavy industry company, have chosen the corporate debt restructuring (CDR) route to restructure its debt of close to Rs 7000 crore.

Led by IDBI, the bankers will discuss terms and conditions of the CDR package early next week, reports added.

In September 2014, at a joint lenders' forum, where the company was asked to make a presentation, the latter had reportedly suggested restructuring of its debt outside the CDR mechanism. For, it explained, the company had plans to raise funds from the market for expansion and the CDR tag would jeopardise the plan. Companies usually refrain from getting the CDR tag, as it raises concern over timely completion of orders.

Pipavav Defence & Offshore Engineering Company reported net loss of Rs 68.33 crore in Q2 September 2014 as against net profit of Rs 4.54 crore in Q2 September 2013. Net sales declined 74.13% to Rs 208.17 crore in Q2 September 2014 over Q2 September 2013.

Pipavav Defence is an integrated defence, heavy engineering and offshore oil & gas assets construction company.

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