Shiv Vani rejects 'malicious' bankruptcy rumour

Vol 16, PW 21 (16 May 13) People & Policy
     

Shiv Vani managing director Prem Singhee has hit out at claims his company is verging on bankruptcy.

For the past few weeks rumours have been circulating that creditors want to sell Shiv Vani's assets to recover Rs3500cr ($700m) in debts to ICICI, IFCI, State Bank of India, Punjab National Bank, Standard Chartered Bank and others. “This is absolute nonsense,” Singhee tells us.

“Everything is normal. There is no problem, our rigs are operational and we are doing well.

” Singhee blames competitors for spreading the rumours. “Everybody needs funding these days,” he said.

“Even you need money to run your business.” Shiv Vani is India’s largest onland driller with more than 30 onland drilling and workover rigs.

Other businesses include seismic acquisition, gas compression and EPC contracts. "Twenty of our 30 rigs are operational," says a second Shiv Vani source.

But he admits "cash flow" problems resulting in delayed Service Tax (ST) payments to the government. "Shiv Vani has not deposited ST collected from Oil India and ONGC,” he says.

“It has defaulted on ST payments of Rs200cr ($40m). And Oil India and ONGC don’t pay Shiv Vani invoices until it deposits ST with the government and this has led to a cash crunch.

” As a result Shiv Vani is delaying salary payments to employees for up to three months and many are deserting the company to work for competitors. ONGC and Oil India are Shiv Vani's biggest clients with rigs in Assam, Rajahmundry and Gujarat.