Debt-ridden ABG Shipyard on Tuesday reported a net loss of Rs 822 crore for the quarter ended December 2016 as the company is in ‘deep financial crisis’.
The company had posted a net loss of Rs 1,266.22 crore during the corresponding quarter of the previous fiscal.
The firm said with scant resources and high attrition rate of employees, it could not publish its financials in time.
“The company is in deep financial crisis and its operations are closed, barring ship repair business at very low level. Its Dahej Yard is shut for last two years with agitative labour and staff.
“With this the management of the company has witnessed a high attrition rate of employees and scant available resources. Hence, the company could not prepare and publish its financials in time,” ABG Shipyard said in a BSE filing.
The company also said it has defaulted in repayment of loans and covenants of the CDR scheme of lenders.
Seeking to recover their loans worth about Rs 17,000 crore, lenders have already put ABG Shipyard on the block.
“There has been suspension of operations at Dahej yard and low key operations of the Surat yard and its net worth has eroded. Certain lenders/creditors and statutory authorities have initiated legal proceedings against the company, including filing of winding up petitions and recalling the loans,” ABG Shipyard said.
The company said it has approached the bankers and looking for strategic investors to infuse further fund.
The company’s total income from operations stood at a meagre Rs 4.54 crore during the period under review.
Its total expenses stands at Rs 312.39 crore in the quarter under review, as against Rs 1,066.22 crore in the corresponding quarter in the year-ago period.
The lenders to the company — a consortium of about two dozen banks, led by ICICI Bank — have mandated SBI Caps for finding a buyer for their 51 per cent equity, which lenders got after conversion of debt.
The company earlier had said the lenders have shortlisted few “prospective bidders” for the company after invoking their right to change the ownership and its board has authorised few top officials, including Chairman Rishi Agarwal, to take necessary steps with respect to the proposed transaction.
The lenders have been trying for a long time to recover their loans, including through Corporate and Strategic Debt Restructuring routes.
In view of the financial challenges faced by the company, the lenders had decided to invoke the rights of the lenders to change the ownership of the company or to acquire assets and liabilities.
Lenders had acquired majority stake in the company upon converting part of their debt into equity under SDR scheme.
ICICI Bank had acquired the highest 11.08 per cent stake in the company in October last year by exercising its option to convert CCPS into equity. The consortium of lenders had also restructured their loan in 2013 under CDR scheme.
In August last year, the company’s board had also approved the SDR invoked by its lenders. The lenders also include SBI, Dena Bank, PNB and IDBI Bank.
Incorporated in 1985, ABG Shipyard is the flagship company of ABG group with interests in shipping and cement sectors. It manufactures ships and rigs across two facilities in Gujarat at Dahej and Surat.
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