Shipping Corp buying 29 ships for Rs6,000 crore

The Shipping Corporation of India (SCI), which is coming up with a follow-on public offer (FPO) opening November 30, plans to invest `6,000 crore for acquisition of 29 ships by 2012.

A part of the FPO mop-up worth Rs1,300 crore will be used for ship acquisition.

A top SCI official told DNA the company is likely to tap overseas funds to acquire these ships. “We may raise fund globally, which we keep doing for ship acquisition,” the official said without elaborating.

According to the Ministry of Shipping, the company has placed order for four panamax carriers at Rs1,095.72 crore. It has also ordered six handymax carriers for Rs1,239 crore. Panamax and handymax are categories of bulk carriers.

The company also plans to acquire four aframax crude carriers for Rs971 crore, a sub-class of oil tankers.

The plans also include anchor handling, towing and supply vessels, among others. (See table).

Of the 29 vessels, three have already been delivered to SCI, and at least eight more are likely to be delivered in this fiscal.

This is as part of the company’s plan to replace vessels which are at the end of their economic life as well as to enhance capacity. With the addition of the new ships, the company plans to double capacity at around 10 million dwt.

As per the vessel acquisition programme in the 11th Five Year Plan, SCI has to acquire 62 vessels. The order for the remaining 33 vessels is likely to be placed by March 2012. Going forward, another 13 vessels are likely to be added to the SCI fleet by 2015.
A total of 100 ships are to be acquired by 2020.

Divestment of 10% government equity in SCI and fresh equity issue equivalent to 10% of its existing equity are on the cards as part of the FPO.

The equity sale and issue of shares will reduce the government holding in SCI to 63.75%, from 80.12% at present.