SCI up 20 per cent as government clears stake sale
06 Oct 2010
Shares in state-run Shipping Corporation of India gained nearly 20 per cent today following Tuesday's announcement that the cabinet has approved a 10 per cent stake sale in the country's largest shipping firm.
The cabinet committee on economic affairs also allowed the company, to issue fresh shares for another 10 per cent to part finance its expansion plans.
SCI plans to spend as much as Rs20,000 crore (over $4.3 billion) over the next two years to acquire 57 new ships.
SCI will offload a total of 20 per cent of its equity through fresh issue and sale of existing stock.
The cabinet committee on economic affairs yesterday gave its approval for SCI to issue fresh equity of 10 per cent, amounting to 4,23,45,365 shares and another 10 per cent of an equal number in existing shares in the domestic market as per SEBI regulations.
Retail investors will get a discount of 5 per cent on the issue price of the shares while 0.5 per cent of the issue size (i.e. 4,23,454 shares) will be reserved for employees of the company, who again are entitled for a 5 per cent discount on the offer price.