Construction and real estate major Shapoorji Pallonji Group has acquired 50 per cent equity stake held by state-controlled Shipping Corp of India Ltd in its equal equity chemical tanker joint venture SCI Forbes Limited for an undisclosed amount.
SCI Forbes had commenced operations in 2009 with four new chemical tankers, each having a capacity to carry 13,000 tonnes of cargo. The joint venture company was formed to tap the demand for moving petrochemicals from West Asia.
Shapoorji Pallonji Group firms Forbes & Co Ltd and Sterling Investment Pvt Ltd already held 25 per cent each in SCI Forbes and with transaction the firm becomes a wholly owned venture.
AZB & Partners acted as an advisor to Shapoorji Pallonji in the transaction.
SCI is the only Indian shipping company operating break-bulk service, international container service, liquid, dry bulk service, offshore service, passenger service, in addition to manning, managing a large number of vessels on behalf of various government departments and organisations.
The Mumbai-based company is under immense pressure to bring down its losses which have eroded its net worth. The company posted a loss of Rs 275 crore for the full fiscal ended on March 31, 2014, its third loss making year in a row. In fiscals 2012 and 2013, the company had posted losses of Rs 428.2 crore and Rs 114.3 crore, respectively.
As per the guidelines by the Department of Public Enterprises for government-owned companies, any state-run company that posts losses for three consecutive years will lose its navratna status, a tag that gives greater financial autonomy.
(Edited by Joby Puthuparampil Johnson)
