The B K Goenka-led Welspun Corp has started seeking buyers for the land it got as part of the ABG Shipyard deal, sources aware of the development told Moneycontrol. Welspun acquired the ABG Shipyard in 2022 through a liquidation process under the Insolvency and Bankruptcy Code.
The move to sell the land parcel comes after the group had previously indicated that it was exploring various new business options for the shipyard, whose assets it had acquired for a consideration of Rs 659 crore in September 2022.
As part of the acquisition, Welspun Corp acquired certain specified assets of ABG Shipyard such as partially built obsolete ships and scrap estimated to be over 150,000 tonnes as well as leasehold land and other infrastructure on the site. Welpsun had indicated that the metal and metal scrap not required for business purposes would be disposed of over 12 to 15 months.
The shipyard located at Dahej, Gujarat, is spread over 165 acres and has a 1,000-metre waterfront.
Following the acquisition, in its Q3FY23 post-earnings call, the company’s management mentioned that Welspun will also evaluate new business areas like defence, green steel manufacuring facility, offshore wind, and oil and gas structures to ensure optimal utilisation of the asset.
“Option number one happens to be shipbuilding, ship repair... We are also looking in terms of can this facility be converted into where we can have some green steelmaking facilities... We are exploring each and every option absolutely in detail so as to come out with a clear-cut roadmap for the next three to five years’ time that what will be the best sustainable offering and which will be value accretive,” Vipul Mathur, managing director and CEO, Welspun Corp, told analysts at that time.
The Welspun management had indicated that the sale of metal and metal scrap could fetch Rs 700-800 crore.
Welspun, in its latest earnings call for Q3FY24, said that it has already liquidated 60 percent of the metal and metal scrap and the rest will be monetised in the next three to four months.
However, after having sold the majority of the metal and metal scrap at the shipyard, Welspun has dropped its plans of utilising the land for other purposes and has started engaging with interested buyers for the sale of the land bank, industry sources told Moneycontrol.
“But of course, there is the land bank there. There is the infrastructure there. So all those assets, in a way, become free of cost on our balance sheet because we would have already monetised whatever we had invested by just liquidating the metal scrap. That removes any load on our balance sheet completely. And we will decide what to do with this land bank and these assets. We are looking at multiple options,” Welspun CFO Percy Birdy told analysts in the post earnings call for Q3FY24 results.
The proposed sale of the ABG Shipyard land could be closed as soon as next month, sources told Moneycontrol.
Emails sent to Welspun Corp had not elicited a response at the time of publishing this story. The copy will be updated after receiving the company’s comments.
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