India’s ABG shipyard is likely to sell a stake to a Russian firm to inject finances into the loss-making firm.
The Mumbai based naval shipbuilder has confirmed that it engaged with a Russian firm to sell a stake to improve the company’s financial strength but it did not reveal which Russian firm as discussion is going on, Sputnik News reported Friday.
“Company is exploring the possibility of strategic investors so as to improve the Company’s financial and operational strength. For this purpose, company has appointed Rothschild investment banker,” according to a statement of the ABG shipyard submitted to Bombay Stock Exchange. It is assumed that the shipyard firm received all required internal approval for this deal.
The company reported loss of $557 million in the financial year ending March 2016. Total debt of the company is approximately $2.5 billion.
“The main reasons for increased losses are low level of business activity resulting into low turnover, impairment of inventories and increased interest cost. The global economic slowdown has severally impacted the ship building industry,” the company’s annual statement mentioned.