Do you know the India’s largest private shipyard has gone into liquidation

227 Published by admin 5月 27,2019

ABG shipyard, once India's largest private shipbuilder, has announced the start of liquidation under the bankruptcy law.

ABG shipyard was established in 1985. It is one of the three private shipyards approved by the Indian navy to build various types of ships.While ABG has the potential to build infrastructure and book new orders from local customers, it has failed to attract the right buyers due to overcapacity in the global shipbuilding industry.

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BG shipyard began to run into difficulties in 2014. Negative factors such as declining orders, cancellation of orders, rising costs of ship construction and delayed investment in equipment expansion hit ABG shipyard hard.In 2015, ABG shipyard delivered the last ship in the handheld order.

The Indian court decided to liquidate ABG, although Liberty House, the UK metals group that was the sole bidder, said its offer for ABG exceeded its liquidation value.Sundaresh Bhatt, a partner at BDO, a Dutch consultancy, has been appointed liquidator of ABG shipyard, which was ordered to liquidate by the state corporation of India (NCLT) on April 25th.

Liberty House had previously committed to prepaying ABG's creditor Banks about 4 billion rupees ($57 million), with the rest to be paid over five to 10 years, people familiar with the matter said.

The liquidation value of ABG shipyard is just over 20 billion rupees ($287 million), according to independent valuers.ABG is about 160 billion rupees ($2.297 billion) in arrears.

Earlier this year, a creditors' committee (CoC) led by India's ICICI Bank had passed a resolution supporting the resolution.ABG's creditors' committee includes 22 Banks, led by icici.

Liberty House was the sole bidder in the first two rounds of bidding at ABG shipyard.Last year, Liberty House proposed using ABG's existing shipbuilding facilities to build a steel mill to recycle metal waste.At the time, Liberty House offered 52 billion rupees ($747 million) for ABG shipyard.At the end of last year, however, creditor Banks rejected a settlement offered by Liberty House.

ABG became the second Indian shipyard to fail this year after Bharati Defence and Infrastructure, which went into liquidation in January.Both have licences to build warships for the Indian navy.Like Bharati, the collapse of ABG will cause hundreds of local workers to lose their jobs.

At the same time, the government is seeking to revive India's shipbuilding industry as part of its "Make in India" initiative.In February, the ministry of shipping overhauled a cargo support policy for local Indian shipowners, giving priority to the construction of Indian ships when transporting imports and exports or providing other services to state-run enterprises, such as dredging and offshore oil exploration support.(This article is from the international shipping network)

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