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Gujarat Govt to decide on stake sale in Alcock Ashdown before March-end - 2012-02-20


The Gujarat Government has launched fresh attempts to divest its stake in the Bhavnagar-based shipping company Alcock Ashdown (Gujarat) Ltd or AAGL and is likely to take a decision in this regard before March-end.

The company, wholly-owned by the State Government, has an interesting history and attempts to offload stake have come to naught so far for one reason or another. So, the company’s fate has remained in a nearly ‘comatose’ condition since at least 2002, with some signs of revival here and there, when the State Government decided to divest for the first time.

In a fresh attempt, the State Government invited expressions of interest in November 2011 from qualified consultants for appointment of advisors to the government for divestment of its stake in AAGL.

Mr V.S. Gadhvi, Managing Director of Gujarat Minerals Development Corporation (GMDC), who is also the acting Managing Director of Alcock Ashdown (Gujarat), could not be reached for comment as he is on election duty in Uttar Pradesh. However, sources told Business Line here on Friday that this time the State Government is “serious” on the issue and a decision is likely to be fast-tracked.

Alcock Ashdown (Gujarat) has two ship-building yards in Bhavnagar and Chhanch (Amreli) districts in 27 acres and 10 acres in the coastal Saurashtra region. Its order book was about Rs 800 crore and losses at Rs 170 crore in 2010-11. When the State Government toyed with the divestment idea, AAGL’s order book increased from Rs 25 crore (2003-04), Rs 43 crore (2004-05), Rs 720 crore (2005-06), Rs 760 crore (2006-07) and to Rs 1,500 crore (2006-07). This forced the Government to shelve the divestment plan. The company’s turnover also increased and it made profit coming out of the red during the period.

In 2007, again, the Government put on hold its divestment plans for a second time with the receipt of bids for Rs 169 crore against the reserve price fixed at nearly Rs 350 crore, despite the company’s turnaround and booming business. During the 2008 global slowdown, Alcock Ashdown (Gujarat) lost orders worth Rs 210 crore, forcing the management to postpone the divestment plans, again. The decision to privatise the company was taken when the global ship-building business was stagnant. When the State Government decided to exit ship-building, however, this business suddenly zoomed and the company’s order book position improved significantly.

Alcock Ashdown, originally a British-owned company, was taken over by the Government of India in 1975 and then by the State Government in 1994 following liquidation. Its entire paid-up equity had been paid by the State Industries Department, Gujarat Industrial Investment Corporation (GIIC) and Gujarat Maritime Board (GMB) and the State Industry Commissioner has been its ex-officio Chairman. Its corporate management had a board of directors with nominees from the Indian Institute of Management-Ahmedabad (IIM-A) and Indian Navy, among others.

Source: Hindu Business Line