Goa-based shipbuilder Chowgule and Company Pvt Ltd is set to acquire the Mangalore shipyard of bankrupt shipbuilder Bharati Defence and Infrastructure Ltd for Rs 75 crore in a private deal under India’s bankruptcy law, multiple sources said.
Bharati Defence and Infrastructure is undergoing liquidation through private sale of specified assets after the corporate insolvency resolution process (CIRP) failed to find a buyer for what was once India’s second biggest private yard with multiple facilities spread across the western and eastern seaboards.
“We’ve bid for it (Mangalore yard) and our bid has been accepted. There are still a few issues that need to be cleared up which is why the matter has been referred to the National Company Law Tribunal,” Arjun Chowgule, Executive Director, Chowgule and Company Pvt Ltd, told ET Infra.
The yard is part of the family-owned Chowgule Group founded in 1916.
The deal is expected to be finalised in the next few weeks.
The Mangalore yard, spread over 49.31 acres with 200 metres waterfront, will help Chowgule and Company expand its facility at a time when the shipbuilder has received an order for five additional electric hybrid, multipurpose cargo carriers from Swedish shipowner AtoB@C Shipping AB.
Describing the project as a “marquee project in Asia in this class”, Arjun Chowgule said that his firm has secured another order from a Dutch company for similar electric hybrid vessels.
AtoB@C Shipping AB, the Swedish unit of Finland’s ESL Shipping Ltd, had ordered a series of seven energy-efficient, electric hybrid vessels at Chowgule and Company for about 70 million Euros ($82 million) in September last year.
AtoB@C Shipping said it has exercised the option to build five additional electric hybrid vessels at the Indian yard.
The greenhouse gas emissions, including CO2, per cargo unit transported will decrease by almost 50% compared to the existing ships, making the vessels the most efficient in the world in their class. The vessels’ battery packs, shore-side electricity solution and electric hybrid use enable completely emission-free and noise-free port calls. Ships can also arrive and leave the port with electric power only.
These new 1A ice class vessels of 5,350 dead weight tons (DWT) will be market leaders in terms of cargo capacity, technology, and innovation, AtoB@C Shipping said.
The first two of the new vessels are under construction at the Goa facility of Chowgule and Company, and the planned delivery of the first vessel is scheduled for the third quarter of 2023. The planned delivery of the last vessel is slated for the second quarter of 2026.
The orders placed by AtoB@C Shipping and the Dutch owner at Chowgule will benefit from a financial assistance scheme offered by the Union government to shipbuilders that will run till 2025.
The scheme took effect from April 2016 and the assistance is currently available at 17 percent of the “contract price” or the “fair price”, whichever is lower, as determined by international valuers, for any vessel built in India.
The Mangalore facility can construct large offshore vessels, cargo vessels and aluminium boats. The yard has two building berths, vacuum lifter, lift and shift transporter, automatic blasting and painting machine, CNC plasma cutting machine, covered pipe fabrication facility, block blasting booths, block storage facilities, frame bending machine, fixed rail gantry cranes, EOT cranes and tractor fitted cranes.
“Our aim is to be the most efficient shipbuilders and we feel that the Mangalore yard represents a good asset and there is a lot we can do. If it is planned properly with the right type of investment in terms of capital and the equipment, we can have a shipyard that can deliver good value to commercial ship owners across the world. Our strength has always been the commercial shipbuilding export market. That’s really where we are known, we are not known on the naval side, but that’s something that we can start addressing with a facility like this where the capacity would be quite big,” Chowgule said.
Two of the five biggest shipowners in Europe, according to Chowgule, have blocked the shipbuilder’s existing capacity till 2026. “Now, we have the other big ones, 3-4 out of the top 15, who are looking at blocking up capacity of our new facilities,” he stated. Chowgule also said that he had talks with some prospective Indian fleet owners on new orders. “We need to get the financing environment right for them. Unfortunately, it’s not right with the way the loans are structured,” he added.
