Essar Shipping to spend $1bn to acquire 12 vessels, 2 rigs
Essar Shipping, part of the diversified Essar Group, plans to spend $1 billion in the next two years to acquire new assets as it sees ‘tremendous’ growth opportunities, Financial Express reports.
The company also hopes to return to the bourses in a few weeks, its managing director AR Ramakrishnan said.
The company has ordered 12 new vessels and two jack-up rigs to prepare itself for increased business from outside the group companies. Essar Shipping currently has 27 ships and 13 oil rigs. The purchases could be funded mosthly through debt. “Close to $600 million has already been arranged for and paid to shipbuilders for supply of ships,” Ramakrishnan said.
Currently, nearly 50% of its business comes from outside the Essar fold and the company expects this to increase to 55% soon if India’s exim trade grows at the current pace.
India’s exports grew 54% in April-July 2011-12 to $108.35 billion against $70.36 billion in the same period last year. Imports also jumped 40% to $151.04 billion compared with $107.88 billion.
Policymakers are aiming to more than triple India’s exports to $750 billion by 2017 from $225 billion last year, a plan which could provide big business opportunities for shipping companies.
“There is a tremendous growth opportunity in the country as exim trade is increasing rapidly. There is good demand for Indonesian and Australian coal from domestic power firms. Our own group companies will also bring us substantial business,” Ramakrishnan said.
The company has given orders for new vessels to ABG Shipyard and South Korea’s STX (Dalian) Shipbuilding. “We are receiving two ships in October and one ship every month thereafter. In 12-18 months, all the ships will be delivered,” he said, adding delivery of rigs would take a year.
Essar Shipping, which demerged from the erstwhile Essar Shipping Ports and Logistics in May this year, is in the process of relisting on the Bombay Stock Exchange and National Stock Exchange. “We have got clearances from the two exchanges and are expecting approval from the Securities and Exchange Board of India in the next few weeks,” Ramakrishnan said. The company made a net profit of Rs 18.83 crore in the first quarter of current financial year.
The company also hopes to return to the bourses in a few weeks, its managing director AR Ramakrishnan said.
The company has ordered 12 new vessels and two jack-up rigs to prepare itself for increased business from outside the group companies. Essar Shipping currently has 27 ships and 13 oil rigs. The purchases could be funded mosthly through debt. “Close to $600 million has already been arranged for and paid to shipbuilders for supply of ships,” Ramakrishnan said.
Currently, nearly 50% of its business comes from outside the Essar fold and the company expects this to increase to 55% soon if India’s exim trade grows at the current pace.
India’s exports grew 54% in April-July 2011-12 to $108.35 billion against $70.36 billion in the same period last year. Imports also jumped 40% to $151.04 billion compared with $107.88 billion.
Policymakers are aiming to more than triple India’s exports to $750 billion by 2017 from $225 billion last year, a plan which could provide big business opportunities for shipping companies.
“There is a tremendous growth opportunity in the country as exim trade is increasing rapidly. There is good demand for Indonesian and Australian coal from domestic power firms. Our own group companies will also bring us substantial business,” Ramakrishnan said.
The company has given orders for new vessels to ABG Shipyard and South Korea’s STX (Dalian) Shipbuilding. “We are receiving two ships in October and one ship every month thereafter. In 12-18 months, all the ships will be delivered,” he said, adding delivery of rigs would take a year.
Essar Shipping, which demerged from the erstwhile Essar Shipping Ports and Logistics in May this year, is in the process of relisting on the Bombay Stock Exchange and National Stock Exchange. “We have got clearances from the two exchanges and are expecting approval from the Securities and Exchange Board of India in the next few weeks,” Ramakrishnan said. The company made a net profit of Rs 18.83 crore in the first quarter of current financial year.