SCI to raise Rs 5,000 cr in 2 years through ECB

The Shipping Corporation of India (SCI) today said it will borrow over Rs 5,000 crore from overseas markets in the next two years to finance its fleet expansion programme.

SCI, expects to raise Rs 1,184 crore from the follow-on public offer (FPO) which opened for subscription today, in which government is divesting 10 per cent stake.

The project cost for 30 vessels ordered is Rs 7,000 crore. While proceeds from the FPO will take care of fund requirement to the extent of about 20 per cent, the balance would be be raised through the external commercial borrowing (ECB) route, SCI Director Finance B K Mandal told PTI.

"The loan raising through the ECB route shall be over next two years," he said.

The largest shipping company of India has total loan of close to Rs 3,700 crore, of which 92 per cent was raised through the ECB route.

"ECB, is linked to London Inter Bank Offer Rate (LIBOR), a global benchmark interest rate, on which the international lenders (banks) charge a margin varying from 22 basis points to 200 basis points," Mandal said.

"We raised loans through ECB at different times and at different margins so the effective rate of interest to us is as low as 2 per cent per annum," he claimed.

SCI had raised loan of $260 million through the ECB route last year, he said.

The company has placed order for 30 ships for now. After the FPO, order for 15 more ships will be placed, he said.