The Company proposes to part finance this project cost with the help of Rs 1,248.67 crores (including premium) raised through equity already issued and term loans from banks and financial institutions to the tune of Rs 935.2 crores. To meet the remaining funding requirement, Pipavav Shipyard Ltd proposes to enter the capital markets with a public issue of 86,850,000 Equity Shares of Rs 10 each through 100% book building process. It has already filed DRHP with SEBI for the purpose. JM Financial Consultants Pvt. Ltd, Citigroup Global Markets India Pvt. Ltd and Enam Securities Pvt. Ltd are the Book Running Lead Managers (BRLMs) for the Issue. SBI Capital Markets Ltd, Kotak Mahindra Capital Co. Ltd and Motilal Oswal Investment Advisors Pvt. Ltd are the Co-BRLMs for the Issue. IL&FS Investsmart Securities Limited is Advisor to the proposed offerings.

The Company is constructing the Pipavav Shipyard based upon the principle of concurrent shipbuilding, which involves the production of vessels while simultaneously completing construction of the shipyard. The construction of the Pipavav Shipyard is being conducted on an owner-managed basis. It has agreements with three international shipowners for the construction of 26 Panamax bulk carriers of 74,500 DWT each for delivery from 2009 to May 2012 at an aggregate contract value of US$ 1,063.12 million (Rs. 42,992 million).

The Pipavav Shipyard was originally promoted by SKIL Infrastructure Limited and Grevek Investments. Punj Lloyd has now joined as a co-promoter through its acquisition of 129,361,538 Equity Shares of the Company. As a co-promoter, Punj Lloyd has agreed to conduct all of its offshore business, excluding the construction and fabrication of subsea pipelines, in India through Pipavav Shipyard and is expected to provide the Company with access to opportunities in the Offshore Business industry, which includes business opportunities in the fabrication and construction of offshore platforms, rigs, jackets and vessels for the oil and gas industry. The construction of the Pipavav Shipyard is expected to be completed in October 2008.

Pipavav Shipyard to raise $125m
The Economic Times, 20 Sep, 2007, 0306 hrs IST, Anto T Joseph, TNN

MUMBAI: Punj Lloyd and SKIL Infrastructure, co-promoters of Pipavav Shipyard (PSL), are raising $125 million private equity through pre-IPO deals.

After New York Life, 2i Capital and Trikona Capital infused $75 million — $25 million each — PSL has now roped in Citadel, the $17-billion US fund, and is in final talks with AIG for $25 million each, to take the total PE investments to $125 million.

PSL is lining up Rs 800 crore (around $200 million) initial public offering (IPO) in the next 2-3 months. It will sell around 10% stake in the IPO. Post IPO, its paid-capital is expected to be around Rs 500 crore. IDBI, IL&FS and Exim will hold around 12%.

The shipyard, currently being built at Pipavav, on the Gujarat coast, has attracted many financial investors. Sources said the five US-based investors will cumulatively hold around 40% in PSL, which claims to build a 600-metre-long dry dock, the third-largest in the world after Hyundai’s yard in South Korea and Dubai Drydocks. Dry dock in shipping parlance means a yard for repairs.

Sources also said that PSL has appointed a battery of coordinators and managers for the maiden issue, including Citigroup, JM Financial, Enam, BLRM, SBI Caps and Motilal Oswal. The draft red-herring prospectus (DRHS) is expected to be filed with the market regulator Sebi in a few days.

Citadel has invested $25 million at Rs 45 per share having Rs 10 face value, while it has signed for options worth another $50 million for Rs 75 per share at a later stage. The domestic engineering major Punj Lloyd recently informed the Bombay Stock Exchange (BSE) that it has now entered into a shareholders’ agreement with PSL and acquired 12.94 crore shares at Rs 27, aggregating to Rs 349.28 crore.

It constitutes 28.8% of the present paid-up share capital of PSL and 25.6% of the diluted paid-up capital. The shipyard has already built an order book position of $1.1 billion, and has already received advances of $100 million.

Afcons India, which was awarded a Rs 330-crore contract to build a dry dock in Pipavav, is progressing ahead of schedule, said sources. PSL is also developing over 700 acres in Pipavav for ship-building activities, and will spend around Rs 1,000 crore over the next two years to build additional infrastructure. The yard will build 12 large ships and other offshore assets simultaneously.

The proposed shipyard, once completed, will be the largest in India and the fifth-largest in the world. Designed to handle ships of all sizes, the yard has already employed around 400 people, and is in the process of appointing another 300. One of the investors, Trinity, has received the right of first refusal to real estate opportunities in a proposed 150-acre township development in the yard’s vicinity. The township will provide housing, recreational facilities, schools, hospitals and commercial establishment.

 

Pipavav may file for IPO; Punj Lloyd sees Green

Money Control 14th Sept 2007

Punj Lloyd may be looking at significant value unlocking via Pipavav Shipyard. According to reports, Pipavav Shipyard is likely to enter the capital market soon. And Punj Lloyd had only recently bought 25% stake in Pipavav Shipyard in August.

Punj Lloyd had bought the stake for around Rs 400 crore valuing the company at around Rs 1600 crore. Sources say that Papavav Shipyard is likely to file for an IPO in a weeks time. They have appointed merchant bankers towards this issue.

Pipavav Shipyard is likely to raise around Rs 800 crore from this IPO, but whether this will be a frsh issue or from dilution of promoters stake is not known. But what is certain is that this will be great value unlocking for Punj Lloyd. Watch this space for more.