The Hindu : Business : Centre to divest 15 p.c. in SCI

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Friday, Nov 18, 2005

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Business

Centre to divest 15 p.c. in SCI

Quota to be set aside for employees

NEW DELHI: The Government has decided to divest 15 per cent of its stake in Shipping Corporation of India, Minister of Shipping T. R. Baalu said on Thursday.

SCI at present has 80.12 per cent Government equity and with this proposal materialising, the Government equity will come down to around 65 per cent, he said.

The proposal has been put forth before the disinvestment department, which would decide on the timing of the disinvestment, he said.

Out of 15 per cent to be divested, 10 per cent would be offered to employees, while the remaining 90 per cent would be offered to investors. The face value of shares will be split into Rs. 5 each, he said.

Divestment in mini-ratna

When asked whether it was the Ministry's own decision Mr. Baalu said the Disinvestment Department had sought the comments of the Shipping Ministry on the matter in response to which he had agreed to "diluting'' of 15 per cent stake in the mini-ratna.

Without divulging the amount the Shipping Ministry intends to raise from the disinvestment, Joint Secretary Shipping Susheel Kumar told PTI that "We have not set any target on the quantum of money to be raised through the disinvestment. The Disinvestment Department would decide according to the current market valuation.''

The Shipping Ministry's nod was forwarded to the Disivestment Ministry a month ago and the latter's response was awaited, he said.

Mr. Kumar said the Government was concerned over the slow rate of FDI in the shipping sector and pointed out that perhaps taxes and berthing charges were disproportionate.

"However, we are seized of the matter. We shall see that remedial measures are duly initiated,'' he said.

To acquire new vessels

The Ministry of Shipping has cleared the SCI's proposal to acquire 16 new vessels worth Rs. 2,868 crore and sought approval of the Planning Commission to buy ten new ships worth Rs. 2,341 crore.

"Decks have been cleared for acquiring 16 vessels and the Government has earmarked Rs. 2,868 crore for this purpose,'' Mr. Kumar told reporters on the sidelines of the Economic Editors' conference here.

Elaborating on the acquisition plan, he said the Ministry had given the go-ahead to the PSU to buy two cape-size bulk carriers worth Rs. 550 crore.

"Besides, the SCI has been permitted to acquire six handmax (Rs. 818 crore), two container vessels (Rs. 528 crore) and six other carriers (Rs. 972 crore),'' Mr. Kumar said. Block approval had been granted to the SCI for Rs. 2,341 crore, he said.

The state-owned shipping giant has a fleet of 84 vessels, aggregating to about 2.7 million GT comprising general cargo vessels, cellular container vessels, crude oil tankers, product tankers, bulk carriers and offshore supply vessels.

With the introduction of the tonnage tax regime coupled with the shipping boom, the country's tonnage had witnessed a steady growth.

The tonnage had shot up to 8.31 million GT on October 1 this year from 7.05 million GT as on June last year.

The share price of Shipping Corporation of India rose by 2.5 per cent to Rs. 158.45 on the Bombay Stock Exchange.— PTI

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