Shipping Corporation of India (SCI) is in negotiations with the World Bank (WB) and Asian Development Bank (ADB) to raise over $1 billion to fund acquisition of new vessels.
Shipping Corporation of India (SCI) is in negotiations with the World Bank (WB) and Asian Development Bank (ADB) to raise over $1 billion to fund acquisition of new vessels. The company plans to place orders for new vessels so that it completes acquisition of 62 vessels by the end of the eleventh plan (2007-12). ?SCI is in need of loan and is in discussion with the international agencies,? said a senior shipping ministry official on the condition of anonymity.
B K Mandal, director (finance), SCI, confirmed that the company was in talks with a number of international banks and lending agencies but added that because of the financial crisis, international agencies did not have enough funds to lend. ?We are in talks with many international banks. ADB is one of them. We need funds to acquire new vessels. Due to the economic crisis, the international agencies do not have much money to lend,? Mandal told Financial Chronicle.
Shipping industries across the world are facing severe shortage of funds due to the present slowdown. Until six months ago, shipping companies were able to raise debt at an interest rate as low as 4 per cent in the foreign markets.
In order to maintain their market share, the Indian shipping companies alone have chalked out plans to acquire vessels worth about $20 billion in the next four years. The ministry of shipping had earlier sent a proposal to the finance ministry to set up a corpus of Rs 10,000 crore for soft-lending to the shipping companies. ?We are still waiting for some response from the finance ministry. Every shipping firm is struggling to raise funds for its expansion. However, the decision has to come from the finance ministry,? a senior shipping ministry official said.