Shipping Corporation of India: Government invites financial offers for sale by September

The government is expected to seek financial offers for the Shipping Corporation of India by September after completing the process of splitting up non-core assets, an official said.

As part of the strategic sale process, the Government is spinning off Shipping House and Training Institute and some other non-core assets from Shipping Corporation of India (SCI).

“The split-up process is time-consuming. We would be ready to seek financial offers in 3-4 months,” the official said. Shipping Corp’s Board of Directors met last week and approved an updated demerger plan for the spin-off of SCI’s non-core assets 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 carving out all non-core assets into the new SCILAL company.

According to SCI’s balance sheet, the value of non-core assets held for demerger as at 31 March 2022 was ₹2,392 million.

The SCI Board approved a demerger plan to spin off the identified non-core assets in August last year and formed SCILAL in November 2021 to hold those assets of the company, which reports to the Department of Port Shipping and Waterways. The Ministry had directed SCI in April 2022 to expedite the process of spinning off SCI’s non-core assets to SCILAL, and also asked SCI’s Board of Directors to review the spin-off plan for the spin-off of the non-core assets, including Shipping House, Mumbai, check and MTI, Powai.

“Such changes have no impact on the carrying value of non-core assets in the financial statements. Implementation of the plan, including the amended plan, is ongoing and with MoPSW and DIPAM’s reiteration of accelerating the demerger process, there is a certainty that the process can be completed in the near future,” according to the independent SCI’s report -auditor submitted to the Board of Directors.

In March last year, the government received several offers to privatize the Shipping Corporation of India.

In December 2020, the Department of Investment and Public Asset Management (DIPAM) invited for an Expression of Interest (EoI) for the strategic divestment of its entire 63.75 percent stake in Shipping Corp of India along with the transfer of management.

In November 2020, the cabinet approved the strategic sale of Shipping Corp. granted. The privatization of SCI is expected to be completed in the current financial year. The government has budgeted to collect 65,000 crore from CPSE divestments in the current fiscal year 2022-23.

While the government has already raised ₹3,000 billion from the sale of a minority stake in ONGC, another ₹21,000 crore would come from Life Insurance Corporation’s ongoing IPO this month and 211.14 crore after Pawan Hans handed over 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.

Published on

08 May 2022

Cheryl Tenny

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