India Steamship Company, the K K Birla group shipping outfit, announced today that it would invest Rs 625 crore to expand its fleet over nine years. Under the programme, codenamed Millennium Plan, the company would acquire five Panamax carriers and four tankers, managing director L M S Rajwar, said.
The announcement follows writing off long-term debts and settling dues with its creditors. India Steamship has written off most of its debts in the financial year ended March 31, 2001, and it had also settled outstanding dues with banks and the Central government.
Addressing shareholders at the 73rd annual general meeting, Rajwar said the investment plan would raise the company's tonnage capacity from 1.3 lakh tonne a year to 5 lakh tonne. Rajwar presided over the meeting in the absence of chairman K K Birla.
The investment plan would be financed by borrowing and internal accruals of funds. The company has decided to transfer the entire net profit of Rs 1.52 crore for 2000-01, to the Ship Acquisition Reserve. Plus, it has a capital reserve of Rs 137.70 crore. The proceeds from hiving off old ships would also be used for new acquisitions.
"The company was preparing itself for new acquisitions over the past couple of years by writing off as well as settling its debts. Since it has become a debt-free company now, it is the time to go for expansion," he added.
The company has also identified size and types of ships to be acquired. It will begin implementing the plan by acquiring a 10-11 year-old ship for around $10-11 million. On the other hand, India Goodwill - the oldest cargo of its fleet, will be sold off shortly. Ratnadeep and Ratna Abha - two other cargo ships in the fleet - will also be replaced in next two years.
The shareholders criticised mass absence of directors at the meeting. Of the 12-member board, only four directors - L M S Rajwar, S N Sachdev, Arun Mahajan and I P Singh Roy - attended the meeting.
One shareholder, carrying proxy for 500 equity shares demanded poll on all resolutions, including the one to adopt the profit and loss account. The resolutions were, however, carried.
During 2000-01, India Steamship has disposed off two subsidiaries - I S S Shipping & Trading Services and I S S Shipping Services - in favour of two investment outfits of the K K Birla group. India Steamship currently has only one subsidiary, I S S Holding, under its wing.
