ABG Shipyard in exclusive talks with Privinvest Holding to sell majority stake

ABG Shipyard is close to signing a deal to sell a majority stake in the company to Germany-based Privinvest Holding, sources with direct knowledge said. Privinvest is expected to buy up to 49 per cent stake in ABG Shipyard while the promoters of the company will continue as a minority shareholder post the deal, sources said. Both the companies entered into an exclusivity period for the transaction on May 29.

Privinvest Holding which has shipbuilding operations across the world is interested in picking majority stake in ABG Shipyard not only to have a presence in India but to also gain from its defence licence to build warships.

In the first leg of transaction, Privinvest could be buying 25 per cent stake in ABG Shipyard via issuance of fresh equity. This will trigger an open offer for the shares of ABG Shipyard. Privinvest may get 3 board seats and new management to ABG Shipyard post the deal. sources indicate that Privinvest could be doing the transaction through one of its subsidiaries.

ABG Shipyard aims to exit Rs 7200 cr Corporate Debt Restructuring (CDR) by the end of FY16. The debt-laden company requires Rs 1000-1200 crores fund infusion to exit CDR and the new strategic buyer is expected to provide for it, a source said. Lenders to ABG Shipyard will be required to give their final nod for the deal to be completed.

Privinvest Holding did not comment on ET NOW's query regarding the deal. ABG Shipyard spokesperson said, No comments."