Shipping Corp sets FPO price band at Rs 135-140/share

Shipping Corporation of India (SCI), one of India's largest shipping companies in terms of Indian flagged tonnage, has set a price band at Rs 135-140 a share for its follow-on public offer (FPO) of 8,46,90,730 equity shares, which will open for subscription on Tuesday, November 30, 2010, reports CNBC-TV18.

The issue comprises of a fresh issue of 42,345,365 equity shares by the company and an offer for sale of 42,345,365 equity shares by the President of India, acting through the ministry of shipping, government of India. The issue comprises a net issue to the public of 84,267,276 equity shares and a reservation of up to 423,454 equity shares for subscription by eligible employees.

The share closed at Rs 145.40, down Rs 1.3, or 0.89% on the Bombay Stock Exchange while the price band is set at a 3.7% discount to its current market price. The company aims to raise around Rs 1,100 crore through the FPO.

SCI has approximately 35% share of Indian flagged tonnage as of June 30, 2010, according to the website of Directorate General of Shipping, Government of India (DG Shipping). As of September 30, 2010, it owned a fleet of 74 vessels of 5.11 million dead weight tonnage (DWT).

Its fleet includes dry bulk carriers, very large crude carrier (VLCC) tankers, crude oil tankers, product tankers, container vessels, passenger-cum-cargo vessels, phosphoric acid and chemical carriers, LPG and ammonia carriers, and offshore supply vessels.

The issue will close for subscription on December 3. Central and state governments' holding will reduce to 63.75% post issue.

The company will not receive any proceeds from the offer for sale by governments. However, net proceeds from fresh issue will be used for part funding the equity portion for the acquisition of certain vessels by company and general corporate purposes.

SBI Capital Markets Limited, ICICI Securities Limited and IDFC Capital Limited are the book running lead managers to the issue.

Source: www.moneycontrol.com

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Gaurav Agarwal
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DENIP Consultants Pvt Ltd