Reliance Infrastructure Ltd (RInfra) on Thursday said that the Pipavav Defence and Offshore Engineering intends to exit the corporate debt restructuring package, which was announced in March 2015.
On the books of accounts, Pipavav Defence has a fairly large debt, which it owes to about 23 banks. RInfra is in the process of acquiring Pipavav Defence and has made an open offer to the shareholders to acquire additional 26 per cent stake in the company. On December 2, the open offer process will commence and close on December 15. After the successful completion of the process and other regulatory clearances, Pipavav Defence can exit the package and repay the loan in a conventional manner.
RInfra in a statement said that exiting from the package will enable improved financial flexibility and increased business opportunities for Pipavav Defence. It could then pursue the Make in India and Skill India programmes announced by the Centre,
The change of control, reconstitution of the Board (Pipavav Defence) and change of name of the company to Reliance Defence and Engineering Ltd will be completed in January 2016, the statement added.
Currently, Pipavav Defence is promoted by SKIL Infrastructure and has a licence to build warships in its shipyard. It is these unique assets, which has attracted RInfra to the company.
RInfra is heavily betting on large defence contracts, which would be placed under the Make in India programme. The company wants to increase its presence in the marine, aeronautical and land based warfare systems.
The marine systems manufacturing would be based out of Pipavav shipyard, Gujarat, while aeronautical systems would be made in Nagpur, Maharashtra. For setting up land-based systems, manufacturing base, RInfra is in talks with the Madhya Pradesh government.