ABG Shipyard, which is bidding for control of Great Offshore, is seeking to mop up $150 million (Rs 720 crore) to mainly meet its working capital requirements.
ABG, which originally sought to raise $200 million (Rs 960 crore), will seek shareholder approval for the new plan on July 7.
?On July 7, we will be taking the mandate of our shareholders which will allow us to raise the funds,? Dhananjay Datar, CFO, ABG Shipyard, told FE.
However, Datar said the company is still undecided on how the money will be raised. Moreover, he also denied that the money will be raised to fund the acquisition of Great Offshore.
?We can raise the money in various ways. It could be through preferential allotment or any other route. The money will be used towards our working capital requirements,? said Datar.
?It may be used for retiring debt. I can?t really say what we?ll use the funds for. But we already have funds for the acquisition plans of Great Offshore,? he added.
According to Datar, the company has cash reserves of around Rs 250-300 crore and a credit line of Rs 31,000 crore from IL&FS.
ABG is expanding its Dahej port in Gujarat, one of its two manufacturing bases, aiming to attract orders from offshore oil and gas explorers.
Contracts for ABG?s offshore supply vessels account for about half the company?s order backlog of 103 ships.
?The company also makes bulk carriers and vessels for the coast guard. Total orders have increased by more than a fifth to about Rs 11,500 crore from a year earlier,? said Datar.
Both ABG, India?s biggest non-state shipyard, and Bharati, the second-biggest, are vying to buy Great Offshore.
Acquiring Great Offshore would help ABG expand into rigs from its existing vessels that transport workers and equipment.
During the financial year, sales of ABG are expected to increase more than 35%, as compared to last year when sales were up 46% to Rs 1,412 crore. ABG, which already owns about 2.5% of Great Offshore, offered to pay Rs 375 a share for another 32.12% stake.
ABG will use its own funds and debt to buy the stake, chairman Rishi Agarwal had said on June 23.
As demand rises for drilling ships, the battle for Great Offshore will intensify as ABG is waiting for Bharati Shipyard to revise its offer price from Rs 403 per share.
Earlier, Datar had said, ?We will decide our strategy depending on what Bharati decides. We don?t see any reason to react right now. We will wait till their next move and then only decide our path, going forward.?
Shares of ABG Shipyard closed at Rs 196.45, down 0.88%, on Friday, on the Bombay Stock Exchange.