India's fist LNG ship, Laxmi, has been salvaged from the threat of a takeover by its lenders, with the Shipping Corporation of India (SCI) and Mitsui OSK Lines of Japan deciding to put in $55 million in the project.
The project had come under a cloud in the wake of the Dabhol controversy.
SCI chairman and managing director P K Srivastava said, "We have decided to infuse the required $55 million, along with Mitsui OSK Lines, to take charge of the ship. At present, we are working out the modalities." Srivastava declined to give further details.
Lenders to the project had threatened to foreclose the mortgage and takeover the ship unless the sponsors of the project brought in $55 million by October 21.
Greenfield Holding Company, a joint venture between Mitsui, SCI and Enron, had been floated for the construction of the ship. This company will take delivery of the ship on November 15, 2001, which is under construction at a Japanese yard.
Mitsui holds a 60 per cent stake in the project, while Enron and SCI hold 20 per cent each.
The $220 million ship was to be financed by $55 million equity and $165 million debt. A consortium of lenders led by ANZ Bank had disbursed $110 million for the project. Later, they decided against disbursing the balance $55 million and insisted that the sponsors of the company put in the money.
Their contention was that in the wake of the controversy surrounding the Dabhol power project, the shipping venture was not viable any longer. They also raised serious questions about the ability of the three promoters of Greenfield Holding Company to service the debt. The ship was to transport gas from Qatar to the Dabhol power plant in Maharashtra.
Meanwhile, Enron is likely to exit the venture in the wake of its decision to get out of the 2,184-mw, $ 3 billion, Dabhol power project following a payment dispute with the Maharashtra State Electricity Board.
Shipping industry sources said the US-based multinational has been actively consideration this move but no final decision had been made.
