ABG Shipyard has decided to divest its subsidiary Western India Shipyard Ltd and will invite bids from prospective investors.
The decision was taken in the meeting of the board of directors of the company held today.
"Board of Directors of the company, in their meeting held today, i.E. October 6, 2016 have decided and approved, inter alia, divestment of its subsidiary Western India Shipyard Ltd and authorised Executive Director and other company officials, jointly to invite suitable bid from the prospective investors and negotiate the deal including the best price, terms and conditions with them," it said in a regulatory filing.
Yesterday, private lender, ICICI Bank, acquired 11.08 per cent stake in the company by converting its debt into equity.
ICICI acquired 11,046,424 equity shares of ABG Shipyard by exercising its option to convert CCPS into equity.
On August 11, the board of the debt-ridden company had approved its strategic debt restructuring invoked by its lenders.
The company's Corporate Debt Restructuring (CDR) Lenders, apart from ICICI bank include SBI, Dena Bank, PNB and IDBI Bank.
It also said the board has approved raising of the company's share capital to Rs 2,000 crore.
In May, ABG Shipyard said the company along with the lenders is exploring the possibility of bringing in strategic investors and discussions are going on with several parties.
The debt-ridden firm's net loss in April-June quarter this fiscal widened to Rs 1,710.68 crore against a loss of Rs 374.86 crore in the year-ago period.
Its total income during the quarter plummeted to Rs 2.05 crore, over Rs 21.95 crore in the year-ago period.
Incorporated in 1985, ABG Shipyard is the flagship company of ABG group with interests in shipping and cement sectors and manufactures ships and rigs across two facilities in Gujarat at Dahej and Surat.
It is one of the three private shipyards in India approved by the Indian Navy to build various types of naval vessels and has built 23 vessels for Indian defence sector.
Shares of the company closed at Rs 33.15 apiece on BSE, down 1.19 per cent from the previous close.
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