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Old 2nd August 2017, 09:57   #1
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Default Ahmedabad-based ABG Shipyard files for bankruptcy

http://www.livemint.com/Companies/0X...oceedings.html

In a 4 July stock exchange filing, ABG Shipyard, while admitting that it was in a “deep financial crisis”, reported a loss of Rs822 crore for the quarter ended December 2016. The firm had posted a net loss of Rs1,266.22 crore in the year earlier. The company said it was facing severe manpower crisis and hence there was a delay in filing the quarterly earnings.
The company also said it had defaulted on repayment of loans and covenants of the corporate debt restructuring (CDR) scheme of lenders. As a result, the CDR scheme was discontinued on 1 March, it said in the July filing.
The company’s lenders had put the shipyard, with debt of about Rs10,000 crore, on the block. They attempted to find a buyer for their 51% stake, which they got after conversion of debt to equity. However, they could not find any buyers.


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Any maritime industry people wanna comment ? This shipyard was launched amidst much hullabaloo and hype. Is it a response to the global slowdown in the shipping industry due to lower freight rates ?
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Old 3rd August 2017, 10:07   #2
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Default Re: Ahmedabad-based ABG Shipyard files for bankruptcy

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Originally Posted by D33-PAC View Post
lower freight rates ?

Also, fracking and oil pipelines as well as lowering of costs in non-conventional, renewable energy has reduced demand for oil transportation. China's coal imports have also peaked in 2016 according to recent statistics.

Second, lower demands in the US and Europe has slowed down Chinese exports growth substantially leading to slowdown in Korean industry (in particular) leading to lower margins globally
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Old 3rd August 2017, 11:31   #3
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Default Re: Ahmedabad-based ABG Shipyard files for bankruptcy

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Any maritime industry people wanna comment ? This shipyard was launched amidst much hullabaloo and hype. Is it a response to the global slowdown in the shipping industry due to lower freight rates ?
Building ships in India has never been profitable because of high import content and lack of scale. Starting 2002, Government used to provide 30% subsidy for the shipbuilding industry - that is, if a shipyard get a $10 million order, Govt pays them $3 million.

Now, the above subsidy was removed in 2008 I think (don't recall the year exactly) which forced shipyards to load up on debt to clear their order books. ABG Shipyard / Bharati Shipyard are almost dead because of debt.

However, this 2016 article says subsidy is back under 'Make in India' initiative - with 20% payout from the Government.
http://maritime-executive.com/articl...ipyard-subsidy

Last edited by smartcat : 3rd August 2017 at 11:32.
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Old 4th August 2017, 02:21   #4
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Default Re: Ahmedabad-based ABG Shipyard files for bankruptcy

First of all I don't know why someone will choose to build ships in India when China and Korea are masters in anything to do with metal structures and steel fabrication .

Their cheaper labor, higher skill, better technology, more experienced yards should crush anyone not from those regions in totality !

Reality of MAKE IN INDIA is reality triumphs and initiatives must take a back seat to reality !
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Old 4th August 2017, 23:26   #5
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Default Re: Ahmedabad-based ABG Shipyard files for bankruptcy

As from reports in today's newspaper Cochin Shipyard is the only profitable campany in the Ship Building Sector. Thanks to 75% of its orders coming from the Govt of India. This resulted in the 67* oversubscription of its IPO.
However since the playing field wouldn't have been level especially for Govt Contracts, a private player in this sector would have had a hard time. Govt should have supported it so as to nurture the business in its the relatively nascent stage.
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Old 5th August 2017, 01:20   #6
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Default Re: Ahmedabad-based ABG Shipyard files for bankruptcy

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Building ships in India has never been profitable because of high import content and lack of scale.
Absolutely right. Forget about building ship, we have not been able to offer ship repair facilities too. Ironically there is waiting period for ship's drydocking (periodical service) at Dubai yard and 70% worker over there are Indians.

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In a 4 July stock exchange filing, ABG Shipyard, while admitting that it was in a “deep financial crisis”, reported a loss of Rs822 crore for the quarter ended December 2016. The firm had posted a net loss of Rs1,266.22 crore in the year earlier.
This was coming since BHARATI shipyard went south.

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First of all I don't know why someone will choose to build ships in India when China and Korea are masters in anything to do with metal structures and steel fabrication .
Reality of MAKE IN INDIA is reality triumphs and initiatives must take a back seat to reality !
We have lacked attitude & commitments, even toward building our naval ships, frigates & submarines etc.
I recall, around 2009, a technical superintendent telling us that they had to tow a SUPPLY VESSEL to Colombo shipyard because of lack of proper service from Mumbai (HUGHES) port.

Regards-Sonu
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