Punj Lloyd, a leading services provider in energy and infrastructure, has acquired 25.1 per cent stake in Pipavav Shipyard Ltd for Rs 403 crore ($100 million). The company is also planning to mop up around Rs 900-1,000 crore through private placement to fund the deal and other capital expenditure.
Talking to Hindustan Times, Atul Punj, Chairman and Managing Director of Punj Lloyd, said the acquisition of the 25.1 per cent stake was strategic in nature, as it would help in fabrication for building offshore platforms and processing equipment for the petrochemicals and refining industries. "The proposed investment in Pipavav Shipyard will provide Punj Lloyd access to capabilities to serve the oil exploration and production market and the petrochemicals sector more effectively," he added.
Spread over 725 acres, Pipavav Shipyard has 175 acres of developed waterfront. It has confirmed orders worth $358 million and a letter of intent $513 million.
In view of robust oil prices and substantial oil exploration activities in the country, the opportunity for revamping existing offshore platforms and deploying new platforms by upstream oil and gas companies was expected to be significant, Punj said.
Nikhil Gandhi’s Sea King Infrastructure Ltd is the original promoter of Pipavav Shipyard. After this deal, Sea King Infrastructure and Punj Lloyd will have almost equal holding with equal board representation. Other investors in the company are American International Group, New York Life Insurance, Trikona Capital, Infrastructure Development Finance Corporation and Indus Capital.
Pipavav Shipyard will provide Punj Lloyd access to fabrication facilities for platforms and rigs. Punj Lloyd is executing the Heera Field redevelopment project for ONGC. The facility at Pipavav Shipyard can also be used for fabrication of vessels for petrochemicals and refineries.
The company has also secured a $250 million (Rs 666 crore) construction project from the Singapore-based Resorts World at Sentosa Pte Ltd. The project involves sub-structural works at the Sentosa Integrated Resort, including construction and completion of the raft foundation, three levels of the basement and all associated mechanical and engineering work.