SCI set to buy Korean carriers for Rs 1000 cr

National flag carrier Shipping Corporation of India (SCI) will sign a contract with Korean shipyard Daewoo Shipbuilding & Marine Engineering (DSME) to acquire two very large crude carriers (VLCCs) for over Rs 1000 crore.

"We are planning to place orders with Daewoo for two VLCCs. We are expecting to take the delivery of these vessels in next three years," a senior company executive told Business Standard.

Earlier, the government had cleared purchase of 2 VLCCs at a cost of Rs 1136.08 crore with each carrier having a capacity of 300,000 dead weight tonne (DWT).

The executive said the company would raise 80 per cent of the finance through external commercial borrowings while remaining part would be met through internal accruals.

The estimated cost for one VLCC is estimated at over Rs 568 crore. However, the price of the vessel could only be finalised after the agreement. In normal course, it takes nine to 11 months for constructing a VLCC.

But, all shipyards in the world are booked till 2008 and therefore vessel delivery is expected to be delayed.

As soon as the company signs the agreement with the Daewoo yard, it would approach the domestic or international market for funds with best financial terms for SCI. At present, two SCI owned VLCCs are deployed in India and other international routes.

Apart from these two vessels, SCI is also planning to acquire two Capesize bulk carrier, six Handymax carrier, four container vessel, six product tankers, four Aframax carriers and four Panamax carriers.

The company is also planning to acquire more offshore vessel in next financial year.