Bharati Shipyard-Apeejay shipbuilding JV on hold

In 2007, Bharati had signed an agreement with unlisted Apeejay Shipping to build a modern shipbuilding yard along India's eastern coast.

"We have put those plans on hold as there are some issues regarding land. It all depends on the political situation," Managing Director PC Kapoor told Reuters.

Land acquisition has been a contentious issue in India and expansion projects of many majors, including that of South Korea's POSCO, have been delayed.

Kapoor said it was not possible to say when the project would be revived.

"At the moment, the demand is uncertain, unless that also revives, we cannot say anything."

He said Bharati Shipyard, which has an order book of about 50 billion rupees, was still witnessing some buoyancy in the defence and offshore segments.

However, plans to raise funds by Great Offshore, in which it owns nearly 50 percent, has also been delayed, said Kapoor, who is also the executive director of Great Offshore.

Last October, he had said Great Offshore had plans to raise up to $200 million through a share sale to institutions, fresh debt or issue of foreign currency convertible bonds, to expand and replace ageing fleet.

"At the moment, market sentiment is not conducive. So those plans are on hold at the moment. The plans are definitely there, and if sentiment improves we will execute the plans at that time," he said.

In 2011 thus far, the main BSE index has declined 11.5%.

In February, the offshore services unit of Great Eastern Shipping Co had said it would drop plans for an initial public offering of shares due to market conditions.

At 1:53 p.m., Bharati Shipyard shares were down 1.89% at Rs 145 in a weak Mumbai market.