The proceeds will be utilised to part finance the acquisition of more ships as well as meet working capital requirements. The company is planning an issue of 10 crore preference shares and is seeking shareholder nod at its forthcoming annual general meeting.
Gesco is taking the preference share route as it requires long-gestation funds. The company has stated in the AGM notice that the capital will be required for 8 to 10 years. The company at present has a fleet of about 60 ships.
"We definitely have plans for augmenting the fleet, but have not yet decided on the number as well as the class of ships to be added. This is only an enabling resolution," a senior company executive said.
The board is also planning to hike its borrowing limit to Rs 2,500 crore from Rs 1,500 crore. The hike has been sought on the ground that the earlier limit was set in 1992. And that the company now requires more funds to expand its fleet, besides, a chunk of the borrowings is going to be in foreign currency.
The Rs 994-crore Gesco is the country's largest private sector shipping company. Last year it demerged its property division and spun it off into a separate company. The move was prompted by the fact that the company wanted to focus on its area of core competence -- shipping.
It has a strong presence in the bulk and tanker sectors. It is also planning a foray into transportation of liquefied natural gas which is being seen as a sunrise are in the Indian shipping sector.
