SOURCE: THE HINDU
India’s biggest warship builder Mazagon Dock Shipbuilders Ltd said it will weigh a bid for bankrupt shipbuilder Reliance Naval and Engineering Ltd (RNAVAL) if it is available at a “reduced price” in a “distress sale”, chairman and managing director Narayan Prasad said on Thursday.
State-owned Mazagon Dock, which will shortly launch a share sale and list on the bourses, says it will wait till the corporate insolvency resolution process currently underway at the Ahmedabad bench of the National Company Law Tribunal (NCLT) is completed before taking a call on the yard.
Russia’s state-owned United Shipbuilding Corporation are among the 12 who have filed expression of interest to buy Reliance Naval and Engineering Ltd (RNAVAL), the bankrupt shipyard owned by Anil Ambani’s Reliance Group, under India’s bankruptcy law.
“At the end of it, if they go in for an emergency sale at a very reduced price, we have not ruled out giving a bid for the yard because it is going to be a huge technology enabler and a capacity enhancer for me,” said Prasad who had seen the yard from close quarters during his stint with the Indian Navy when it ordered five offshore patrol vessels.
Asked why it did not participate in the invitation for expression of interest called by the resolution professional for RNAVAL, Prasad told BusinessLine: “It is one of the finest shipyards the country has in terms of infrastructure facilities; with the longest dry dock and two goliath cranes of very high capacity. We had contemplated bidding in the beginning, possibly examine the feasibility, but we were little concerned about whether we would be able to bid for the price what it is there. When I look at the land parcel and the infrastructure facilities RNAVAL have, they also have a huge accompanying debt of some ?40,000 crore. We will not be able to get into that, so we are just waiting”.
“Should there be a distress sale of the yard and United Shipbuilding Corporation and all those who are there don’t participate in this and if it is offered to us at a later stage, we can have a look at it with a very positive frame of mind and explore it for future orders as my interactions with the shipyard has shown that it is a very good asset,” Prasad stated.
Currently, Mazagon has an order book worth ?54,469 crore which will last for 6-7 years.
In terms of future prospects, Mazagon has placed price bids for six new generation missile vessels worth about ?12,000-15,000 crore for the Indian Navy while it will submit price bids for six offshore patrol vessels each valued at about ?700-800 crore for which request for proposals have been called by the Navy.
Mazagon is also waiting for the Navy to call price proposals for constructing six conventional submarines fitted with air independent propulsion systems at a total cost of about ?44,000 crores under Project 75i.
Other defence tenders in which Mazagon will participate in the next 1-3 years includes seven new generation corvettes, six new-generation destroyers, six high-speed landing craft, one polar research vessel, three cadet training ships, four multi-purpose vessels, one survey trading vessel for the Navy and eight fast patrol vessels and 12 air cushion vessels from the Coast Guard