 "Yudhishthir Khatau")
Despite a drying revenue stream amid high debt, Varun Shipping, the country's largest carrier of liquefied petroleum gas (LPG), says it is hopeful of a turnaround by December. Chairman and Managing Director Yudhishthir Khatau tells Aditi Divekar about his plan to restructure loans and make his fleet operational. Edited excerpts:
Is Varun Shipping looking to recast its debt via the CDR (restructuring) route? How much of your loan do you plan to recast? Can you share a timeline as to when this is likely to happen?
We are certainly looking to restructure our loan but whether it is the CDR route, I doubt. It will mostly happen outside CDR. Banks and the management are working on this and perhaps by end-August, it will be done. We plan to restructure only the India loan, of about Rs 1,500 crore.
Two of your gas vessels, Maharshi Bhavatreya and Maharshi Dattatreya, have been awaiting dry-dock repair near Dubai for nearly two years. About 25 crew members are also stranded at these vessels, not knowing when they will be relieved. What are you doing about it?
There is a process involved here. Getting a new crew is not easy. However, we have made arrangements for a new crew with a recruitment agency and by next week, we will repatriate the crew on these two vessels.
But you have been giving such deadlines for three months. The crew is not only stranded but lives in pathetic conditions, without even the safety equipment functioning properly.
The company has not compromised on any safety regulation. If the facilities at these vessels are not working, you also have to see how exactly the crew is running it. The functioning of those facilities depends a lot on what the crew is doing with it. We have so far repatriated the entire crew of the six vessels whose dry-docking is complete. Why would we not dry-dock these two vessels? Why would we not repatriate the crew there? They will be repatriated next week.
Your salary payments to the employees are delayed. Especially, the crew on the two vessels near Dubai has not received salaries for nearly eight months, while they have completed more than three times the contract period signed with the company. What is the status here?
We have already dry-docked six gas vessels of the total nine. The crew of the six gas vessels has been paid up to date. I agree that overall there is a backlog but it is of about two months. The salary lag of the crew you mention in particular could be more than two months but I do not have the specifics with me right now.
Your top line has dried up and bottom line is showing losses. Where do you see your business going? The sector overall is beginning to look positive but Varun Shipping seems out of league. How are you going to tackle this?
We have our assets and so we are very much in league. All we need to do is make these ships operational. To do so, we needed funds for dry-dock repairs and so the promoters of this company have infused additional capital, part of which is refundable and partly non-refundable, so that we can repair and charter the vessels. Of the six gas vessels dry-docked, some are on charter and some on bidding but by early September, all will be on charter. The offshore vessels are also on charter, while tankers are awaiting dry-docking. Once the entire fleet starts operations, we will get full revenue, as there is no lead time once dry-dock ends. We should see revenues coming in between September and December.
