Business Profile :Western India Shipyard
Western India Shipyard (WISL) was incorporated in the Union Territory of Delhi May 1, 1992. WISL is a composite ship and rig repair facility in the private sector. The company has the most advanced multi-dimensional and multi-purpose yard offering modern, streamlined, sophisticated ship and rig repair facilities and services. WISL is strategically located at Goa along the west coast of India. The construction of the `Jock Up Barge` namely, PMC-1 of the value of about Rs 188.1 million by the company for PMC Projects (India), is proceeding smoothly and the vessel is expected to be delivered sometime in Jan-Feb. 2007. The operations of the company`s floating dry-dock of 20,000 TLC capacity was suspended during the period from Jan. 21, 2006 to Feb. 10, 2006 to carry out mandatory repairs for the purpose of maintaining its statutory classification certificates. This had a material impact on the company`s operation and performance for the year ended Mar. 31, 2006.
The company reported a loss of Rs 21.36 million for the quarter ended Sep. 2006 as against the loss of Rs 24.94 million during the corresponding quarter in the previous year. Sales for this period increased 11.76% to Rs 141.50 million from Rs 126.61 million. WISL, for the year ended Mar. 2006, had reported a 10.70% increase in sales to Rs 427.93 million as against Rs 386.56 million for year ended Mar. 2005. The company incurred a loss of Rs 233.68 million in FY06 as against a loss of Rs 244.22 million in FY05.
The company wins a major contract from PMC Projects (India), a Adani Group Company, for the construction of `Multi Utility Craft` valuing about Rs 35 million, under the India Flag.
The company wins 3 minor and medium size orders for repairing of 3 vessels namely MV Swatirani, MT Maratha and Pyari Amma valuing Rs 70.00 million totally.
WISL plans for the improvement of systems and ship repair methodology. It also plans to improve interaction with research agencies involved with ship repair and rig repair technology.
Western India Shipyard announces Scheme of Compromise and Arrangement
Western India Shipyard Ltd has announced about the Scheme of Compromise and Arrangement between Western India Shipyard Ltd (the "Company") with its Secured Lenders and Shareholders u/s 391 – 394 of the Companies Act, 1956 with ABG Shipyard Ltd as a confirming Party, as under :
"Background and Rationale for the Scheme :
The Company is presently engaged in the business of repairing, servicing, assembling and fitting of merchant ships and other sea going vessels. The Company had obtained various financial assistances / facilities by way of secured and unsecured loans, debentures, overdrafts, guarantees, working capital, etc. from various lenders. The account of the Company is a non-performing asset in the books of some of its lenders in terms of the provisioning guidelines issued by Reserve Bank of India (RBI).
The Company continues to have poor physical and financial performance since inception in spite of various reliefs and concessions extended by its lenders. The Company has entered into a number of debt restructuring efforts with its lenders, including the most recent corporate debt restructuring package by way of the Restructuring Proposal dated January 28, 2005 proposed by the Corporate Debt Restructuring Cell, a voluntary mechanism for Corporate Debt Restructuring (CDR), set up under the aegis of the RBI (the "Debt Restructuring Package"), but continues to remain a non-performing asset in the book of a majority of is its lenders. It has failed to meet its projections, making the various restructuring packages unviable. The Company also does not enjoy working capital limits required for turnover of approximately Rs 70 Crores as per the Debt Restructuring Package. Due to its poor financial performance, the Company has not been able to retire its debts lending to a huge debt burden. As of March 31, 2006, total debts of the Company were Rs 250.1 Crores, against fixed assets of Rs 122.8 Crores. Due to continuous poor performance and recurring huge losses, the net worth of WISL, has completely eroded. The accumulated losses as on March 31, 2006 are Rs 187.1 Crores. The Company faces a real threat of winding up if it continues its current state of affairs.
The Company has 424 permanent employees and around 250 employees on contract basis, whose interests shall be adversely affected if W1SL, is not revived. Taking into consideration the Company's financial position, any revival would require infusion of funds, settlement of debts and resolution of ongoing litigations.
ABG is a company incorporated under the provisions of the Companies Act, 1956 having its registered office at Near Magttalla Port, Dumas Road, Surat – 395 007. ABC is engaged in the business of shipbuilding and ship-repair. ABG has the largest private-sector shipyard in the country and specializes in the construction of medium sized support and defense vessels. The ABG Group is a leading market player in the Indian marine and shipping industry. The group has interest in all major marine and shipping activities, viz. ship-building and ship-repair, owning and chartering of ships and port operations. Pursuant to discussions between the Company, its major secured lenders and ABG. ABG has evinced interest in being involved in a proposal to rehabilitate the Company. Accordingly, the Company is proposing this composite scheme of arrangement with its secured lenders, with ABG as a confirming party, with a view to rehabilitate the Company into a viable and profitable company, wherein ABG's involvement includes a combination of cash
infusion into WISL, and acquiring a hares in the Company pursuant to the provisions of this scheme of arrangement. As a step towards rehabilitating the Company, and to demonstrate its commitment thereto, ABG shall, immediately upon filing of the Scheme with the High Court, provide a loan of Rs 25,00,00,000/- to the Company towards urgent business requirements of the Company, and has also agreed to provide technical and marketing expertise through a Service Provider Agreement, to be entered into between ABG and the Company simultaneously or contemporaneously to the filing of this Scheme.
The Scheme provides certain options for the restructuring / one time settlement of the debt of the secured lenders of the Company with the involvement of ABG, along with other matters connected with the compromise and arrangement, including reorganization of share capital of the Company."