NEW DELHI, Sept 16: The Defence Ministry has cleared Reliance Defence and Engineering Ltd (RDEL) — known as Pipavav before Anil Ambani took over — for defence projects after a financial and technical capability of the company’s shipyard was carried out in detail.
However, another private player ABG Shipyard did not make the cut, a move that assume significance as Defence Ministry gets set to open the bids for Rs 20,000-crore project of making Landing Platform Dock (LPDs), defence sources said.
The two yards, which had been shortlisted along with L&T for a navy order for four LPDs, had faced corporate debt restructuring and changes in management.
The move prompted the Defence Ministry in October last year to order for a “capacity assessment” report.
While L&T had tied up with Spain’s Navantia for the contract, Pipavav had an agreement with French shipbuilder DCNS and ABG is tied up with US company Alion.
Sources said the financial records of both the yards were taken along with report from the principal banking lenders.
Also, the new cash flow injected into the yard by Reliance Infrastructure Ltd was also discussed in detail.
Following this, the Defence Acquisition Council (DAC) in its last meeting has cleared the capacity assessment of RDEL, defence sources said.
In March last year, Reliance Infrastructure together with its wholly-owned subsidiary Reliance Defence Systems Pvt Ltd, had agreed to acquire from the Promoters of Pipavav Defence approximately 18 per cent shareholding in the company at a price of Rs 63 per share, aggregating Rs 819 crore.
This was followed by an open offer. Post open offer, Reliance Infra now owns almost 35 per cent in the company.
Later on Pipavav Defence also announced its plans to exit the corporate debt restructuring (CDR) package as it would lead to improved financial flexibility and increased business opportunities for P-DOC.
Pipavav Defence has since been renamed as Reliance Defence and Engineering Ltd (RDEL). (PTI)
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