Bharati Shipyard Smooth sailing

Bharati Shipyard galloped 5.16% to Rs 84.55 at 14:29 IST after the founder of Great Offshore pledged another 8 lakh shares, or 2.15% stake to Advitiya Urja, a wholly-owned subsidiary of Bharati Shipyard.
Great Offshore was trading down 1.86% at Rs 273.70 on BSE.
The stock hit a high of Rs 88.40 and a low of Rs 81 so far during the day. The stock had a 52-week high of Rs 864.65 on 8 January 2008 and a 52-week low of Rs 59 on 3 December 2008.
The smal-cap ship building firm has an equity capital of Rs 27.57 crore. Face value per share is Rs 10.
The current price of Rs 84.55 discounts its Q2 September 2008 annualised EPS of Rs 48.11, by a PE multiple of 1.75.
The above transaction takes the total amount of Great Offshore promoter's shares pledged with Bharati to 14.87%, a tad short of the 15% threshold where the company will have to make an open offer for another 20% stake. Great Offshore's promoter's had earlier pledged 30.23 lakh shares (8.14%) with Vishudh Urja, another wholly-owned subsidiary of Bharati Shipyard, and 17.03 lakh shares (4.58%) with Advitiya Urja on 3 December 2008, according to notices issued to the stock exchanges.
P C Kapoor, managing director of Bharati Shipyard was quoted by a section of the media as saying that an open offer cannot be ruled out in case Great Offshore promoters are unable to repay Bharati. Great Offshore, the offshore oil services firm, is the largest customer of Bharati. The shipyard is executing two orders worth Rs 1200 crore for it which includes building a jack-up rig and a multi-platform supply vessel.
So far, Bharati has lent close to Rs 200 crore to Great Offshore, report suggested, adding Bharati will be ready to extend any further loan if needed.
Great Offshore's promoter Vijay K Sheth currently holds 15.7% in the firm. Sheth has pledged shares with Bharati in order to take a loan to repay other lenders and avert a margin call.
Sheth had placed a significant portion of his stake in Great Offshore with Infrastructure Leasing & Financial Services and brokerage Motilal Oswal when acquiring the company from Great Eastern Shipping in April 2005.
The lenders started exerting pressure after Great Offshore's shares dropped over 79% between January and December 2008. Great Offshore's share price, which ended at Rs 278.90 on Monday, 5 January 2009, is down 75.74% from its January 2008 high of Rs 1,149.95.
Bharati Shipyard's net profit rose 28.8% to Rs 33.16 crore on a 46.1% rise in sales to Rs 235.42 crore in Q2 September 2008 over Q2 September 2007.
Bharati Shipyard designs and constructs sea going, coastal, harbor and inland crafts and vessels. Its product-range has been upgraded from the simple inland cargo barges, deep-sea trawlers, dredgers, maneuverable and power-packed ocean-going tractor tugs, cargo-ships, tankers and vessels with applications in the offshore industry.