Shipping Corp. of India buys 8 ships in China
The country’s biggest ship owner by fleet size and revenue, Shipping Corp. of India Ltd (SCI), is buying eight ships from China worth $557.2 million (around 2,513 crore) even as it awaits government approval for a follow-on public offering of shares The deal includes four Kamsarmax dry bulk carriers, each capable of carrying 80,000 tonnes of dry bulk commodities, and four oil supertankers, each with a capacity to carry 318,000 tonnes of crude oil.
A Kamsarmax dry bulk carrier is the biggest ship that can call at the world’s largest bauxite loading port at Kamsar in Equatorial Guinea.
Jiangsu Rongsheng Heavy Industries Group Co. Ltd, based in the eastern Chinese province of Jiangsu, has emerged as the lowest bidder from a list of five technically qualified entities to build the four oil supertankers, including two options, for SCI.
Jiangsu Rongsheng, one of China’s largest private shipbuilders, quoted a price of $106.7 million for each of the oil tankers, at least two people briefed on the public tender said.
They declined to be named because of company policy on speaking to the media.
There is a possibility that the price quoted by Jiangsu Rongsheng could be reduced further through negotiations, they said.
The cost of building an oil supertanker had touched $160 million in early 2008 when the shipping market was at its peak.
The SCI management will inform its board on Wednesday on the outcome of the tendering process, one of the people mentioned earlier said.
A company spokesman declined to comment.
On Monday, SCI said in a statement to the stock exchange it has signed a contract with Jiangsu Eastern Heavy Industries Co. Ltd, for buying four Kamsarmax carriers at a price of $33.3 million each.
Having oil tankers registered in India provides energy security to the country, the SCI spokesman said.
India is heavily dependent on imported crude for its energy requirements. Oil refiners are now seen favouring large tankers to haul crude to cut transportation costs as larger quantities can be shipped at a time. SCI plans to spend about $2 billion to buy 30 more ships by 2015 to replace older vessels and boost capacity, according to chairman and managing director S. Hajara.
It owns and operates a fleet of 75 ships, including two oil supertankers, accounting for around 33% of the total shipping capacity with Indian fleet owners. The company has signed construction contracts with various global shipyards for another 27 vessels worth $1.64 billion; seven of these will enter the fleet this year.
The government is looking to sell 10% of its stake in SCI, in which it currently holds 80.12%, as part of a plan to raise 40,000 crore this fiscal through a share sale in state-run firms.
SCI will also sell 10% fresh shares to part-fund expansion plans.
In March, the company had won approval from shareholders to raise the borrowing powers of the board to 12,000 crore from the earlier 5,000 crore to purchase ships.
A Kamsarmax dry bulk carrier is the biggest ship that can call at the world’s largest bauxite loading port at Kamsar in Equatorial Guinea.
Jiangsu Rongsheng Heavy Industries Group Co. Ltd, based in the eastern Chinese province of Jiangsu, has emerged as the lowest bidder from a list of five technically qualified entities to build the four oil supertankers, including two options, for SCI.
Jiangsu Rongsheng, one of China’s largest private shipbuilders, quoted a price of $106.7 million for each of the oil tankers, at least two people briefed on the public tender said.
They declined to be named because of company policy on speaking to the media.
There is a possibility that the price quoted by Jiangsu Rongsheng could be reduced further through negotiations, they said.
The cost of building an oil supertanker had touched $160 million in early 2008 when the shipping market was at its peak.
The SCI management will inform its board on Wednesday on the outcome of the tendering process, one of the people mentioned earlier said.
A company spokesman declined to comment.
On Monday, SCI said in a statement to the stock exchange it has signed a contract with Jiangsu Eastern Heavy Industries Co. Ltd, for buying four Kamsarmax carriers at a price of $33.3 million each.
Having oil tankers registered in India provides energy security to the country, the SCI spokesman said.
India is heavily dependent on imported crude for its energy requirements. Oil refiners are now seen favouring large tankers to haul crude to cut transportation costs as larger quantities can be shipped at a time. SCI plans to spend about $2 billion to buy 30 more ships by 2015 to replace older vessels and boost capacity, according to chairman and managing director S. Hajara.
It owns and operates a fleet of 75 ships, including two oil supertankers, accounting for around 33% of the total shipping capacity with Indian fleet owners. The company has signed construction contracts with various global shipyards for another 27 vessels worth $1.64 billion; seven of these will enter the fleet this year.
The government is looking to sell 10% of its stake in SCI, in which it currently holds 80.12%, as part of a plan to raise 40,000 crore this fiscal through a share sale in state-run firms.
SCI will also sell 10% fresh shares to part-fund expansion plans.
In March, the company had won approval from shareholders to raise the borrowing powers of the board to 12,000 crore from the earlier 5,000 crore to purchase ships.
