Ministry seeks okay for selling SCI's 20% in JV

NEW DELHI: Shipping Corporation of India’s disinvestment is set to move one step forward with the shipping ministry seeking Union Cabinet clearance for the sale of the PSU’s 20% stake in Greenfield Holding, a joint venture LNG transportation company.
SCI had moved the government late last year seeking clearance to sell its 20% stake, amounting to $11m, to JV partner Mitsui OSK at par following a proposal made by the foreign partner to buy out the PSU’s holding in the company. SCI will recover a $1.2-m loan extended to the joint venture, along with accrued interest, as part of the exit deal proposed by Mitsui.
Sources said the divestment of the 20% holding in Greenfield would improve SCI’s valuation.
Greenfield was initially promoted as a three-way joint venture between SCI, Mitsui OSK and Altantic Commercial Finance, an affiliate of Enron, for transportation of liquefied natural gas for Dabhol Power Company. Mitsui held 60% in the venture, while SCI and Atlanic had 20% each. After the collapse of Enron, Government of Sultanate of Oman picked up Atlantic’s 20% and another 20% from Mitusi, reducing the Japanese company’s holding to 40%.
Greenfield owns an LNG tanker, SS Laxmi, which was built to transport LNG for Dabhol. After Dabhol failed to take delivery of the tanker, Laxmi has been engaged by Oman LNG on a consecutive voyage basis.
The joint venture ran into further trouble after ANZ Investment Bank decided to foreclose its loan to the Greenfield due to uncertainty over long-term deployment of the vessel.
The project is currently funded by a bridge loan of $165m by Mitsui and Government of Sultanate of Oman, and SCI has been under pressure from its partners to pay its share of $33m to the bridge loan.
Greenfield has subsequently tied up with Gulf International Bank for a long-term loan. This loan is tied to the implementation of the long-term charter of the vessel with the Oman government. So far, no date has been fixed for the long-term charter and thus, the availability of the funding has become uncertain.