Rumours of promoters eyeing exit baseless: Bharati Shipyard

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There have been some rumours floating around the market that promoters are looking to exit from Bharati Shipyard . PC Kapoor, MD of the company, in an interview with CNBC-TV18's Udayan Mukherjee, called these rumours baseless and false. He said, "There is no truth in these rumours at all. Some interested parties might have spread these rumours for their ulterior motives."

He further said, "At the moment, we have gone through a very ambitious expansion programme. If the rumours were true, we would not be doing go for the expansion."

Below is the verbatim transcript of the interview. Also watch the accompanying video.

Q: Is there any truth to the talks floating around the market? Are the promoters planning to exit the business?

A: This is absolutely false. There is no truth in these rumours at all. Some interested parties might have spread these rumours for their ulterior motives.

Q: Have you seen these mails which have been doing rounds yourself? What is your take on it? How have you been taking it up now?

A: These rumours are totally false and without any basis. At the moment, we have gone through a very ambitious expansion programme. If the rumours were true, we would not be doing go for the expansion.

Q: These rumours might have emanated from the fact that your balance sheet got quite stretched post the acquisition of great offshore. Do you feel concerned that you are carrying such a large burden of debt on your book post this ambitious expansion exercise?

A: Yes, there is a large debt, but I don't feel any concerned about that. There is much of synergy in both these businesses. In the medium and long-term, it will give us great benefit. In the short-term, there might be a little bit of stress, but we will overcome that. I don't see any reason to not be able to do that. In the medium-term to long-term, it is going to be very beneficial for us.

Q: Your interest cost went up quite substantially in FY11. Interest rates have also been quite high. Will it become a problem to carry this burden of debt with such high interest and to service those?

A: That is engaging our attention. We will be taking steps to correct that. We are aware of this problem.

Q: What would you do? Are you planning to raise equity to replace some of that debt?

A: We are thinking of that. But, we are not discussing with any private equity firm.

Q: Would it be a regular capital raising exercise then, by not selling off a strategic stake or large chunk?

A: Yes, that is right. At the moment, the market sentiment is such that we don't want to go this time to the market. We will wait for sometime for the market to correct.

Q: It will be capital infusion into that company with some dilution of what nature?

A: At the moment, we haven't decided the exact method. We will let you know as soon as we decide that.

Q: Are you categorically denying that there is no private equity interest in the company and you have had no negotiations or deliberations with any party as such?

A: At the moment, there is no such thing going on. It is a figment of somebody's imagination.

Q: Are you looking at restructuring any of that debt that is sitting on your books in any form?

A: Nothing at the moment. We may replace short-term debt by long-term debt, but nothing else aside from that.

Q: What is in the consideration set once the market stabilises? Will it be a QIP kind of a pure equity offering or are you looking at a convertible instrument?

A: We are looking at both. It is not decided as yet. As soon as it is decided, we will let you know.

Q: On hindsight, would you have done the Great Offshore deal or was it an error in judgement?

A: On hindsight, we would have definitely done that. There is a lot of synergy in both the business. The advantages of this association will show up in a few years.