Shipping Corporation to acquire two new VLCCs
19 Apr 2006
Shipping Corporation of India (SCI) Ltd has raised over $206.56 million for two very large crude carriers (VLCC) of 319,000 DWT each, under construction at the Daewoo shipyard in South Korea. These two VLCCs are the largest-ever ships to be ordered under Indian registry, surpassing the two 316,000 DWT VLCCs acquired by SCI earlier.
SCI has signed a loan agreement of $103.28 million with State Bank of India on April 19, 2006 for financing one of the VLCCs. Earlier, on March 30, 2006, the company had signed a external commercial borrowing (ECB) agreement of $103.28 million with KfW, Germany in association with Citigroup and Nordea Bank for financing of the other VLCC. Both these loans have been arranged at fine rates.
This is the first shipping loan offered by KfW to any Indian company. These loans together constitute the highest loan amount ever raised by SCI for ship acquisition.
Both FCNB loan from SBI and the ECB from KfW, Germany in association with Citigroup and Nordea Bank have a 10-year tenure, which commences after the delivery of the respective ships. Both loans have been negotiated on the stand alone financial strength of SCI without any guarantee from the government of India.