SCI makes waves in global shipping
The Shipping Corporation of India (SCI) plans to enhance presence in international shipping by floating offshore arms, forming new JVs and through mergers and acquisitions.
By Debjoy Sengupta, TNN |
KOLKATA: The Shipping Corporation of India (SCI) plans to enhance presence in international shipping by floating offshore arms, forming new JVs and through mergers and acquisitions.
“We are looking at enhancing our presence in overseas markets either by floating subsidiaries or through acquisitions. The SCI is exploring various options in allied as well as shipping-related fields in other countries and we are open to all possible options,” S Hajara, SCI’s CMD, told ET. “We are also exploring possibilities of setting up joint venture companies and forging alliances in existing lines of business, which will further consolidate its position in the maritime world.”
At present, the SCI has stakes in Irano-Hind Shipping Co and three separate LNG transport companies, all of which are overseas ventures. It has picked up stakes in domestic JVs like Sethusamudram Corporation and a venture with Forbes Gokak and Sterling Investments for owning and operating chemical carriers.
Incidentally, the shipping major has decided to acquire 70 vessels at a total cost of Rs 15,000 crore. “We will acquire such vessels over the next five years.
The debt equity ratio for capex that has been lined up will be 4:1. The SCI will have to pump in about Rs 3,000 crore. We have reserves of Rs 2,500 crore. The balance will be sourced over the next few years,” said Mr Hajara.
Interestingly, the SCI has initiated steps to amend its Articles of Association (AoA) to enable it to acquire, merge, set up foreign subsidiaries and promote joint ventures without prior approval of the Centre. At present, SCI’s AoA does not pose restrictions in the formation of joint ventures in India. But they do not permit formation of offshore joint ventures without the Centre’s approval.
Once the AoA is suitably amended, the SCI will be on track to form offshore JVs without Centre’s intervention. However, SCI’s four existing overseas JVs were formed with special permission from the Centre. Guidelines issued by the government for mini-ratnas like the SCI allow it to establish JVs and subsidiaries in India subject to certain conditions.
They also empower the SCI board to go ahead with mergers and acquisitions, subject to certain conditions which have to be met by the company.
“We are looking at enhancing our presence in overseas markets either by floating subsidiaries or through acquisitions. The SCI is exploring various options in allied as well as shipping-related fields in other countries and we are open to all possible options,” S Hajara, SCI’s CMD, told ET. “We are also exploring possibilities of setting up joint venture companies and forging alliances in existing lines of business, which will further consolidate its position in the maritime world.”
At present, the SCI has stakes in Irano-Hind Shipping Co and three separate LNG transport companies, all of which are overseas ventures. It has picked up stakes in domestic JVs like Sethusamudram Corporation and a venture with Forbes Gokak and Sterling Investments for owning and operating chemical carriers.
Incidentally, the shipping major has decided to acquire 70 vessels at a total cost of Rs 15,000 crore. “We will acquire such vessels over the next five years.
The debt equity ratio for capex that has been lined up will be 4:1. The SCI will have to pump in about Rs 3,000 crore. We have reserves of Rs 2,500 crore. The balance will be sourced over the next few years,” said Mr Hajara.
Interestingly, the SCI has initiated steps to amend its Articles of Association (AoA) to enable it to acquire, merge, set up foreign subsidiaries and promote joint ventures without prior approval of the Centre. At present, SCI’s AoA does not pose restrictions in the formation of joint ventures in India. But they do not permit formation of offshore joint ventures without the Centre’s approval.
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Once the AoA is suitably amended, the SCI will be on track to form offshore JVs without Centre’s intervention. However, SCI’s four existing overseas JVs were formed with special permission from the Centre. Guidelines issued by the government for mini-ratnas like the SCI allow it to establish JVs and subsidiaries in India subject to certain conditions.
They also empower the SCI board to go ahead with mergers and acquisitions, subject to certain conditions which have to be met by the company.
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