Varun Shipping to raise Rs 233 cr for fleet expansion
Varun Shipping, which has posted a profit of Rs 45.50 crore for the second quarter, plans to raise Rs 233 crore through preferential issue for fleet expansion.The fleet acquisition would be worth about Rs 2,000 crore and the expansion would be done in the next six to eight months, Company's Managing Director Yudhisthir Khatau said at a press conference here.The Rs 233 crore would be raised through preferential issue of Rs 75 per equity share or optionally fully convertible warrants, while few foreign institutional investors have also been identified for the investments, he said.The company plans to raise the balance Rs 1,767 crore by sale of its existing vessels and through debt.In the past two years, Varun Shipping has brought down its single haul tankers from five to two. It plans to sell the remaining two as well, he said.
The company, which will acquire tankers and gas carriers as well, is not looking at placing new orders, but is planning to buy second-hand fleet.Placing new fleet orders would mean the delivery would come sometime in 2009, which is losing out the present market, he pointed out.Khatau did not give any figures on the number of ships the company is thinking of buying and said It would be difficult to give a figure as depending on the size of the fleet the acquisition numbers would vary.Varun Shipping had earlier planned to raise funds for fleet expansion by getting listed in the Singapore Stock Exchange. "We even got nod from the Singapore government," Khatau said.
In May, when the Sensex had dipped, Varun Shipping decided not to list in the Singapore Stock Exchange as it was not the right time to enter a new market. The company decided to defer its debut in the Singapore Stock Exchange, and hence the preferential issue, Khatau added.