Business Daily from THE HINDU group of publications
Sunday, Oct 29, 2006
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Business Daily from THE HINDU group of publications Sunday, Oct 29, 2006 ePaper |
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Corporate
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Outlook Logistics - Shipping SCI to invest Rs 1,672 cr to buy tankers, vessels Our Bureaus
Making waves The Low Range-1 tankers will have a design deadweight of about 60,000 tonnes and a design draft of 12.50 m. The vessels will join SCI's fleet from the first half of 2010 onwards
Mumbai/New Delhi , Oct. 28 Shipping Corporation of India (SCI) is on an acquisition spree. The company will be investing about $370 million to buy six product tankers and two cellular container vessels. SCI on Friday signed its biggest buying contract for six product tankers with STX Shipbuilding of South Korea. In value terms, this is the biggest contract signed by the company since inception and also the largest contract ever signed by STX Shipyard, a company press release said. Although the company did not reveal the price at which it is acquiring the tankers, sources said each of them would cost about $40 million.
Description
The Low Range-1 tankers would have a design deadweight of about 60,000 tonnes and a design draft of 12.5 m. The vessels will join SCI's fleet from the first half of 2010 onwards. The tankers will be built to the latest international regulations and classed with the Lloyds Register and IRS classification societies.
CCEA gives nod
Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) on Friday approved SCI's plan for acquisition of two cellular container vessels of about 4,300 TEU capacity each at a price of $65.95 million per vessel. SCI's present fleet stands at 80 vessels aggregating about 2.75 million GT (4.79 million DWT), comprising cellular container vessels, crude oil tankers (including combination carrier), product tankers, bulk carriers, LPG/ammonia carriers, acid carriers, passenger vessels and offshore supply vessels.
External financing
In another significant development for the company, a proposal for allowing SCI to avail "external financing up to the extent of 70 per cent of the contract price of each vessel" was also cleared by the CCEA. SCI will meet the balance 30 per cent of cost from its internal resources. The company is at present sitting on a cash reserve of Rs 2,500 crore. The acquisition will lead to replacement of SCI's in-chartered tonnage deployed on India-UK Continent service, reducing its dependence on the in-chartered tonnage. This will help in insulating the company from the fluctuations of the charter market.
Fleet expansion
The company has drawn up a five-year fleet expansion programme, involving a capital expenditure of Rs 15,000 crore for acquisition of 70 ships. This will include replacement of some of its older vessels, as well as tonnage accretion. The proposed acquisitions include VLCCs (Very Large Crude Carriers) and container vessels. In fact, the company has alreadyplaced an order for two VLCCs with a Korean yard, which will be delivered by the third quarter of 2008 and 2009. In the current fiscal, the company has lined up an acquisition plan for 35 vessels, requiring an investment of about Rs 6,500 crore in addition to the ships already on order.
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