Tag: Shipping Corporation of India (SCI)

New Listing: Shipping Corporation of India Land and Assets to debut today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shipping Corporation of India Land & Assets (SCILAL), the demerged non-core entity of the state-run Shipping Corporation of India, will make its stock market debut on Tuesday, March 19.

The stock will begin trading under the Trade-to-Trade (T2T) segment. Under the T2T segment, a trader/investor can only buy stocks on a delivery basis, meaning a full amount for the stock will have to be paid. Intraday and other techniques like Buy Today, Sell Tomorrow (BTST) are not allowed.

SCILAL was incorporated in November 2021 to hive off the non-core assets of the Shipping Corporation of India. This was part of the government’s strategic disinvestment process of the Shipping Corporation, through which it planned to sell its 63.75% stake in the company.

The scheme of arrangement for the demerger was approved by the Ministry of Corporate Affairs in February 2023 and took effect on March 14.

Shipping Corporation had finalised the demerger in a 1:1 ratio, meaning shareholders of Shipping Corp will get one share of the demerged entity for every share they hold.

As per Shipping Corporation’s 2023 annual report, the value of non-core assets held for demerger as of March 2022 stood at ₹2,392 crore.

Shares of Shipping Corporation of India ended 2% higher on Monday at ₹202.7. The stock had gained 54% over the last 12 months.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India may settle for only 58% of its initial divestment target

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Indian government’s ambitious divestment plan for the fiscal year 2023-24 is facing significant challenges, with sources indicating a possible downsizing of the Budget targets.

The Finance Ministry had set an initial divestment aim of ₹51,000 crore, but progress has been sluggish, with only slightly over ₹10,000 crore achieved so far, according to sources who spoke to CNBC-TV18.

There is no new privatisation pipeline and government stake in several blue-chip Central Public Sector Enterprises (CPSEs) is already close to 51%, further limiting options on minority stake sales as well.

The government is now reportedly contemplating a more modest divestment target, possibly ranging between ₹25,000 and ₹30,000 crore.

With the general elections on the horizon, there is an expectation that divestment activities might gain momentum after the electoral process.

Divestment refers to the process of selling off government-owned assets, typically in the form of shares or equity, in public sector enterprises. The aim is to reduce the government’s stake in these entities, promoting private ownership and introducing market-driven efficiencies.

The FY24 divestment goal hinged on two big targets—NMDC Steel and IDBI Bank. However, both face hurdles.

NMDC’s Nargarnar Steel Plant privatisation hit a roadblock after the Home Minister’s statement that ownership of the Chattisgarh-based plant will not go into private hands.

In the case of IDBI Bank, RBI’s fit & proper clean chit is awaited on the expressions of interest which came in early 2023. Tuhin Kanta Pandey, the secretary of DIPAM, had also expressed doubts about the completion of the government’s disinvestment in IDBI Bank before the end of the current financial year.

Slow movement on BEML (formerly Bharat Earth Movers Limited) and Shipping Corp of India Ltd (SCI) privatisations, too, has made the government’s FY24 divestment target unachievable, with no clear timelines for the transactions. For almost 18 months, the Centre has been tied down on the BEML and SCI demerger-related process of separating the non-core entities and getting them listed after securing clear land titles from a number of state governments.  

Just at current valuations, the government’s 30.8% stake sale in IDBI Bank would have fetched the government almost ₹22,000 crore. While offloading 26% in BEML would have yielded less than ₹3,500 crore. SCI privatisation would have fetched slightly over ₹4,000 crore at the current market capitalisation.

All three key privatisations put together yield less than ₹30,000 crore in divestment receipts at current market value in a single year, probably driving home the challenge of steep disinvestment targets set by North Block. 

Responding to the challenges faced in achieving divestment targets, Minister of State for Finance, Bhagwat Kishanrao Karad, stated in a written reply to Lok Sabha on December 18, “Disinvestment is an ongoing process, and execution of disinvestment transactions depends upon administrative feasibility, market conditions, domestic and global economic outlook, and investor interest.”

The government’s last achievement of its divestment target was in FY19 when the Department of Investment and Public Asset Management (DIPAM) garnered a substantial amount from its Exchange Traded Funds—CPSE & Bharat 22, surpassing the budgetary target of ₹80,000 crore with a mobilisation of ₹84,972 crore.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ministry of Corporate Affairs allows Shipping Corporation of India to split core and non-core assets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Ministry of Corporate Affairs (MCA) has granted permission to a plan to split the core and non-core assets of Shipping Corporation of India (SCI), a move that will pave the way for the government to divest its 63 percent stake in the company.

The ET reported that the move had hit a fresh hurdle after more than 40 objections were filed by vendors and stakeholders ahead of its privatisation. In its submission to the corporate ministry earlier, the Shipping Corporation of India Officers Association (SCIOA) and the Shipping Corporation of India Staff Union (SCISU) had sought to protect the interests of employees post privatisation.

The Ministry of Corporate Affairs had called for a final meeting on demerger on December, 29 last year.

Also Read: Momentumiser: Shipping Corporation shares in focus ahead of demerger hearing

The Ministry of Corporate Affairs directed SCI during a final hearing to file its response on how it proposes to address the concerns. But this direction has thrown the state-run company into a tizzy as to who would sign the affidavit. 

The problem arose due to the fact that the delegation of powers in state-run firms such as SCI does not mention instances such as filing of affidavits and the officer signing it. Hence, the company’s board or its chairperson will have to authorise an officer to file the affidavit under his signature.

The Mumbai-headquartered SCI is a government corporation under the ownership of the Ministry of Shipping. SCI is tasked to operate and manage vessels servicing.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Government to invite financial bids for Shipping Corporation of India by September

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government is likely to invite financial bids for Shipping Corporation of India by September, after the process of demerger of non-core assets is completed, an official said.

As part of the strategic-sale process, the government is hiving off Shipping House and the training institute and some other non-core assets of Shipping Corporation of India (SCI).

“The process of demerger is time consuming. We would be ready to invite financial bids in 3-4 months,” the official said.

The board of Shipping Corp met last week and approved an updated demerger scheme for hiving off the non-core assets of SCI to Shipping Corporation of India Land and Assets Ltd (SCILAL) including Shipping House, Mumbai and MTI (Maritime Training Institute), Powai to complete the process of de-merging all the non-core assets to the new company SCILAL.

Also Read: Demerger should come through by June 2022: Shipping Corporation CMD

As per the balance sheet of SCI, the value of non-core assets held for demerger as of March 31, 2022, stood at Rs 2,392 crore. The SCI board in August last year had approved a demerger scheme for hiving off the identified non-core assets and incorporated SCILAL in November 2021, for holding such assets of the company, which is under the Ministry of Ports Shipping and Waterways.

The Ministry in April 2022, had directed SCI to expedite the process of demerger of non-core assets of SCI to SCILAL and also requested the Board of SCI to review the demerger scheme for hiving off the non-core assets, including Shipping House, Mumbai and MTI, Powai.

“Such modifications do not have any impact on carrying value of non-core assets in the financial statements. The implementation of the Scheme including the modified scheme is in process and considering the reiteration by MoPSW and DIPAM to expedite the demerger process, there is a certainty of completion of the process in the near future ,” as per the SCI independent auditor’s report presented to the Board.

In March last year the government had received multiple bids for privatisation of Shipping Corporation of India. The Department of Investment and Public Asset Management (DIPAM) in December 2020, had invited expressions of interest (EoI) for strategic disinvestment of its entire stake of 63.75 percent in Shipping Corp of India, along with the transfer of management.

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The Cabinet in November 2020, had given in-principle approval for strategic divestment of Shipping Corp. The privatisation of SCI is now likely to be completed in the current fiscal. The government has budgeted to garner Rs 65,000 crore from CPSE disinvestment in the ongoing 2022-23 fiscal.

While the government has already raised Rs 3,000 crore from minority share sale in ONGC, another Rs 21,000 crore would come in from the ongoing IPO of Life Insurance Corporation this month and Rs 211.14 crore after the handover of Pawan Hans management control to Star9 Mobility Pvt Ltd, a consortium of Big Charter Pvt Ltd, Maharaja Aviation Pvt Ltd and Almas Global Opportunity Fund SPC, by June.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Shipping Corporation divestment: London-based Foresight Group-led consortium submits EoI

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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London-based Foresight Group International is among multiple bidders who have submitted expression of interest (EoI) for Shipping Corporation of India (SCI).

The government is selling its entire stake of 63.75 per cent in Shipping Corporation of India, along with the transfer of management control.

Apart from the Foresight Group’s flagship company Foresight Offshore Drilling Limited S.A., the consortium includes Belgium listed shipping company, Exmar NV and Dubai-based shipping company GMS DMCC.

Founded By Ravi K Mehrotra, an Indian citizen, who continues to oversee operations as Executive Chairman, the Foresight Group has a long standing operations in India across offshore and onshore drilling. The Group has three offshore jack-up rigs operating for ONGC and one land rig operating for Oil India.

It also operates two jack-up rigs for Abu Dhabi National Oil Company in UAE and oil tankers for Exxon Mobil.

“The three international entrepreneurial shipping companies have come together with a unified belief in the India’s long-term development and growth and we intend to develop the SCI into a global formidable shipping company,” said said Mehrotra.

Foresight Group has owned and operated various categories of ships around the world including refers, tankers, bulk carriers and container ships.

In 2020, the Group also received the LoI for development of Bhavnagar Port to build the world’s first CNG terminal and chemical terminals in joint venture with Mumbai-based Padmanabh Mafatlal Group.

-With agency inputs

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Govt invites preliminary bids to sell 63.75% stake in Shipping Corp of India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government on Tuesday invited expressions of interest for strategic disinvestment of its 63.75 percent stake in Shipping Corp of India along with the transfer of management control. The Department of Investment and Public Asset Management (DIPAM) has issued Preliminary Information Memorandum (PIM) inviting Expressions of Interest (EoI) from potential buyers by February 13, 2021.

Shares of Shipping Corp were trading at Rs 86.30, up 4.54 percent over its previous close on the BSE. At the current market price, the government’s stake sale in Shipping Corp is valued at about Rs 2,500 crore.

The government has appointed RBSA Capital Advisors LLP as its transaction advisor to manage the disinvestment process. The Cabinet Committee on Economic Affairs in November last year gave in-principle approval for the strategic divestment of Shipping Corp. However, the plans were delayed due to the pandemic.

The 2020-21 Budget has set a record divestment target of Rs 2.1 lakh crore. The government has so far raised Rs 12,380 crore through minority stake sale in Central Public Sector Enterprises (CPSEs) and share buybacks this fiscal year.

Strategic sale process of Bharat Petroleum Corporation Limited (BPCL) and Air India is ongoing and both the companies have received ”multiple” EoI from potential buyers.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow