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Shipping Corporation to add ships to its fleet

By IANS,

Chennai: The Shipping Corporation of India Ltd plans to beef up its fleet strength by ordering 15 more ships in 2011 besides the 35 vessels it hopes to get delivered between 2011 and 2014, company officials said here Monday.

“The actual ordering for new vessels will be made based on the demand. We have made the estimates,” Sumathi Sunderajan, vice president, told reporters.

The company is hitting the market with a premium issue (price band between Rs.135 and Rs.140 per equity share of Rs.10 each) to fund the purchase of new vessels.

The 84,690,730 share issue consists of (fresh issue of 42,345,365 shares) by the company and an equal number of shares divested by the government of India.

The issue opens on Tuesday and closes on Dec 2 for qualified institutional buyers and on Dec 3 for retail investors.

A five percent discount on issue price is allowed for retail investors and employees.

According to Sunderajan, part of the issue proceeds and internal accruals will be used for funding the purchase of four bulk carriers, three large container vessels and two very large crude carriers (VLCC) the total cost of which is Rs.2,663.96 crore.

The company will fund the purchase with Rs.637.8 crore from issue proceeds and internal accruals and the balance through debt.

“The bulk carriers are expected to be delivered in 2013 and the other two category vessels by 2014,” Sunderajan said.

The Shipping Corporation of India will be getting deliveries of 26 new vessels (excluding the above nine) over the next four years.

The company’s current fleet strength is 77 with an average age of 15 years.

Queried about the company’s plans of selling ships, Kailash Gupta, director (personnel and administration), said it depends on the economic life of the vessel.

The company has sold 10 ships during 2009 and 2010 and realised Rs.156 crore.