Higher foreign stake in SCI to win back bidders

MUMBAI: The Disinvestment Ministry, in a reversal of its earlier stance, may allow higher foreign investment in Shipping Corporation of India (SCI) in an attempt to placate foreign companies who were unhappy with restrictions on their investment.
The ministry may add a new clause in the proposed shareholders'' agreement for SCI, the country''s largest shipping company, through which foreign investment in the company can be increased gradually.
The ministry earlier asked every foreign bidder to float a special purpose vehicle (SPV) in JV with Indian partner, and restricted their participation to 25 per cent.
This stringent condition forced four foreign investors — CMA-CGM of France, OOCL of Hong Kong, Malaysia International Shipping and Qatar Shipping — to pull out of the SCI race.
The Union disinvestment minister Arun Shourie said the shareholders'' agreement would be drawn up in such a way that an increase in foreign holding in SCI will follow the hike in sectoral cap on the industry.
"We are not against allowing higher foreign investment in SCI, and it can be increased gradually," said the minister. "At present, the cap has been kept deliberately to avoid controversy over the national security issue that erupted during the disinvestment proposal of Air India," said the minister.
Now only four bidders are left for SCI — all of them Indian — Great Eastern Shipping Company, Essar Shipping, Sterlite Industries and Aban Lloyd.