Shipping Corporation of India (SCI) has decided to acquire four ships from the South Korean yard, Hyundai Heavy Industries, at a cost of about $140 million. The move is, however, subject to clearance by the Public Investment Board (PIB).
The PIB clearance is yet to come through, according to SCI sources. The four ships are Aframax tankers of 1,10,000 tonne each. Each tanker is expected to cost about $35 million.
The corporation is planning to finance the acquisition through a mix of external commercial borrowings (ECBs) and internal accruals. Sources said the corporation may raise ECBs to the tune of 75 per cent of the cost of acquisition. If the SCI is unable to raise ECBs, it may go in for a yard credit.
SCI had floated tenders for the acquisition of these tankers earlier this year. Four other companies, apart from Hyundai, had bid for the order. They included two other chaebols - Daewoo and Samsung. Polivi of Poland, too, had submitted a bid. The lone Indian yard in the fray was the Cochin Shipyard.
The current round of acquisition is part of SCI's plan to acquire 44 ships during the Ninth Plan. It has estimated the cost of acquisitions at about Rs 4500 crore.
This is the second attempt by SCI to acquire these tankers. In October, 1997, it had finalised an agreement with another South Korean shipyard, Halla Engineering & Heavy Industries, for acquiring two Aframax tankers of 1,10,000 dwt each. SCI was to reaffirm the agreement in December, 1997. However, Halla shipyard collapsed before that in the wake of the South-East Asian economic crisis.
SCI was all set to raise ECBs to the tune of $100 million for this acquisition. In the wake of the collapse of Halla, it had to defer its debt programme.
