VDLB sanctions Rs 30 cr to Hindustan Shipyard

The Visakhapatnam Dock Labour Board (VDLB), a subsidiary of the Visakhapatnam Port Trust (VPT), has sanctioned a Rs 20 crore inter corporate loan to the Visakhapatnam-based state-owned Hindustan Shipyard Limited (HSL).

The Hindustan Shipyard has been facing financial problems for the last several years and has not been able to complete its old ship building orders due to lack of funds. The shipyard had requested the Ministry of Shipping for financial assistance.

In this connection, the Ministry of Shipping has directed the Dock Labour Board to sanction the inter corporate loan in favour of Hindustan Shipyard.

"According to Ministry of Shipping directions, we have released Rs 10 crore to Shipyard as corporate loan with an interest rate of 6.5 per cent. Another Rs 10 crore also will be released later according to their requirements," K Ratna Kishore, chairman of VPT and VDLB, told Business Standard.

The shipyard would utilise these loan amounts only to complete the old ship building orders, Commodore Y Janardhan, director of HSL, told Business Standard.

The shipyard would use the money to complete the construction of the long pending 700 passenger ship and other small vessels.

Hindustan Shipyard had earlier availed some loans for working capital requirements from different financial institutions but these were utilised for paying wages and other purposes.

This time round the Union Shipping Ministry has strictly instructed that the loan amount should not be used for any other purpose.

Due to the heavy levies, VDLB has been getting Rs 5-7 crore net profits every year and it has a cash reserves of about Rs 80 crore. DLB has been keeping all these reserves in nationalised banks as long-term deposits.