Welspun Corp Rises To Highest In 14 Years After ABG Shipyard Deal
Welspun Corp unit Nauyaan Shipyard has secured some assets belonging to ABG Shipyard, which is under insolvency, for Rs 659 crore.
Shares of Welspun Corp. Ltd. jumped to their highest level in nearly 14 years, after the company and its unit Nauyaan Shipyard Pvt. Ltd. secured some assets belonging to ABG Shipyard Ltd.
The pipes manufacturer, in an exchange filing, said it has paid Rs 659 crore to secure assets belonging to ABG Shipyard, which is undertaking an insolvency resolution plan.
"We are now pleased to inform that the liquidator of ABG Shipyard Ltd. has declared Welspun as a successful bidder...for the private sale of specified assets...under the provisions of the Insolvency & Bankruptcy Code, 2016," it said in the filing. The company has received the sale certificate in terms of the IBC for transfer of the specified assets.
But it notified that the Enforcement Directorate has issued a provisional attachment order for properties of ABG, including the assets Welspun had purchased. Welspun said India's bankruptcy laws doesn't allow assets that have been sold under liquidation to be attached or seized. "The company proposes to take appropriate action in light of the above... and is hopeful of a quick resolution," it said.
The assets include partially built obsolete ships and scrap, estimated at more than 1.5 lakh tons. Welspun said they could be used for defence and commercial ship building, green steel, shipbreaking, EV ships, ship repair and offshore wind, oil and gas structures.
"It is estimated that its potential value would be unlocked within 12-15 months from completion of the acquisition."
During this time, Welspun said it will secure mandatory approvals and accreditations, including defense, international quality certifications, identifying global JV partner and select technologies in the field of green steel, EV ships and offshore fabrication.
Shares of Welspun gained around 5.4% in early trade on Thursday to Rs 298.5 apiece, a 14-year high. Of the five analysts, three maintain a ‘buy’, and one each suggests a ‘hold’ and a ‘sell’, according to Bloomberg data.