Trade unions oppose Cochin Shipyard disinvestment plan

Trade unions have opposed the government move to bring an initial public offer (IPO) for Cochin Shipyard to offload 10 per cent stake, Parliament was informed on Thursday.

Last month, the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, had approved the stake sale in Cochin Shipyard Ltd (CSL) -- the country's largest ship-building facility under government's control.

"Some trade unions like Shipyard Employees Sangh have expressed their opposition to disinvestment of CSL. Cochin Shipyard has deliberated the issue with trade unions," Minister of State for Shipping P Radhakrishnan told Lok Sabha in a written reply. The approval has been given for public issue consisting of 3,39,84,000 equity shares of Rs 10 each amounting to an equity capital of over Rs 33.98 crore of CSL.

The IPO will consist of fresh issue of 2,26,56,000 equity shares and sale of government's stake in CSL worth 1,13,28,000 equity shares of Rs 10, through a public offering in the domestic market.

"The funds likely to be generated would depend upon the listing price of a share, which is subject to market conditions," the Minister added.

The funds raised by CSL will be used to part-finance its expansion like setting up of an international ship-repair facility at Cochin Port Trust area and setting up of a large dry dock within CSL's premises to take up construction of larger ships.