Varun Shipping to sell 2nd gas carrier by May to cut debt

Company's plan to exit VLGC segment will reduce total debt by just 10%

Mumbai-based Varun Shipping will sell its second very large gas carrier,  Maharshi Bhardwaj, by May to bring down debt by $25-26 million, a company executive told Business Standard on Friday.

“We sold Maharshi Vishwamitra to Mercator for approximately $30 million, which reduced our loans by about $25-26 million. The second sale will also reduce loans by the same amount," the executive, who did not wish to be named, added.

On September 30, 2012, Varun Shipping had a consolidated debt of Rs 2,769 crore. The sale of the two carriers will bring down the debt burden by 10 per cent.

After the two sales, Varun Shipping will own two large and seven mid-sized gas carriers. “The company will focus on the mid-sized gas carrier segment, where haulage rates are relatively stable,” the executive said.

Earlier this month, the Directorate General of Shipping withdrew the company’s licence to operate ships for failing to dock these for safety surveys and for not paying back wages to the crew. Surveys for six of the company’s eight ships were overdue for months, the regulator had said in a notice.

Dry-dock repairs have to be conducted twice every five years on a ship, with the interval between them not exceeding 36 months.