The Hindu Business Line : Goodearth Maritime plans IPO by year-end

Chennai, June 13 Goodearth Maritime Ltd expects to come out with its initial public offering sometime before the end of 2008 to raise funds to finance its upcoming $800-million shipyard at Cuddalore, Tamil Nadu.

While Goodearth Maritime is yet to finalise the details, its Managing Director, Mr S. Madhan, indicated to Business Line that the company may need around $150 million (Rs 600 crore).

Goodearth, part of the Chennai-based Archean group, is putting up a shipbuilding facility at the coastal village of Selimbimangalam near Cuddalore.

The yard, which expects to deliver its first ship in 2011, will be capable of producing 25-30 ships a year, depending upon the size of the ship.

The project is to be executed by a separate company, Goodearth Shipbuilding Pvt Ltd.

The promoters have completed acquisition of all the land required, 600 acres, abutting waterfront of 4.5 km.

The foundation stone for the project is expected to be laid by Tamil Nadu’s Chief Minister, Mr M. Karunanidhi, later this month.

Work will begin soon after and in good time the site will be a hub of activity with a lot cutting and welding of steel.

It should be some sight because there will be about 160 cranes in operation.

There will be a lot of Koreans too as Korea Maritime Consultants Co has been retained as consultants to the projects.

Hyundai is supplying the engines — already five engines, each with a capacity of 15,000 bhp, have been ordered for.

Incidentally, Hyundai is also a contender for the EPC (engineering, procurement and construction) contract for the project.

Major centre

When the yard begins functioning in full swing, it will make Cuddalore a major consumption centre for steel.

According to Mr Madhan, the yard will annually process 500,000 tonnes of steel (mild and high tensile).

Goodearth Maritime itself will be a major buyer of ships produced by the yard. Goodearth Maritime is a shipping company that began its life with an about-to-be-scrapped ship purchased in 2003 for $1.5 million (around Rs 7 crore, then). Today, the company’s net worth is Rs 600 crore. Last year, it achieved a turnover of Rs 270 crore, on which it made a net profit of Rs 150 crore — 55 per cent of turnover, an eloquent commentary on the current boom conditions in the shipping industry.

In December 2007, IDFC Private Equity-II invested Rs 260 crore in Goodearth.