India Readies CSL’s IPO

The Indian government is planning to issue 33.9 million shares of state-run shipbuilder Cochin Shipyard Ltd (CSL).

One third of the shares to be issued in the public offering are owned by the government. The net proceeds are expected to be used to finance construction of LNG carriers tendered by India’s gas utility Gail India (GAIL.)

However, the government first plans to carry out capital restructuring so as to enhance the authorized capital to Rs 250 crore, enabling the government to inject Rs 120 crore, Indian daily Business Standard reports.

CSL would be issuing around 22.6 mn new shares, of Rs 10 each, to double the government’s amount, the daily said.

GAIL plans to build one third of its planned nine LNG carriers intended for transportation of LNG from USA to India domestically.

Cochin expressed interest in building the said vessels in August last year. However, Cochin shipyard, like the majority of local shipbuilders, lack the necessary know-how and experience in building these sophisticated ships, and will probably have to outsource for the purpose.

Potential bidder could also be L&T Shipbuilding Ltd, a unit of Larsen and Toubro Ltd, (L&T Ltd) which is said to be in talks with South Korea’s Hyundai Heavy Industries to team up on the project, writes Indian financial daily LiveMint.

“L&T has signed a non-disclosure agreement with Hyundai Heavy Industries for a potential collaboration on constructing the LNG carriers,” the daily writes citing a shipping ministry official.

Cochin Shipyard is also expected to launch talks on cooperation with two South Korean yards shortly.

However, the tender has had several bumps on the road so far.

The company had to postpone for the third time the closing date for the tender as international bidders were turned away by the prerequisite to share their technology with local builders.

In order for GAIL to be able to start its import activities in 2017, the tender, which is already lagging behind, should be finalized and awarded by May.

World Maritime News Staff

 

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