Mumbai, Nov. 21: Great Eastern Shipping Company (Gesco) today decided to pull out from the disinvestment process of Shipping Corporation of India (SCI), disillusioned with the continued uncertainty surrounding the sale of the latter.
G E Shipping, however, indicated that it was pulling out only for the time being, adding that it would re-examine the issue as and when financial bids for SCI are invited, depending on the evaluation of specific transactional matters, business environment at that time and SCI’s performance in the interim.
Making no bones about his disappointment over the delay in SCI’s disinvestment, a GE Shipping official told The Telegraph that since the company was “missing out on business opportunities” and would instead use its huge cash flows to pursue interests in both offshore and shipping. As of March 31 2002, GE Shipping had a total cash flow of over Rs 380 crore.
The withdrawal of GE Shipping leaves only two players in the fray—Essar Shipping and Sterlite Industries.
Initially, when the government had indicated its decision to disinvest its stake in SCI, close to 12 players had submitted expressions of interest (EoIs) to pick up the government’s 51 per cent in SCI.
These included Mitsui O S K Lines, CMA-CGM, OOCCL, Abal Loyd, Videocon International, BPL, Sterlite Industries, Essar Shipping, G E Shipping, Malaysia International Shipping Corporation Bhd and a joint bid by Iffco-Kribhco.
In a communication issued to the bourses today, GE Shipping said that “having pursued SCI’s sale process for well over nine months now, at this point of time, the company has decided not to pursue the acquisition of SCI for the time being”. GE Shipping would, however, review its plans if business conditions were conducive when the government finally invites financial bids, the statement added.
The company’s announcement saw the SCI scrip collapse by close to 13 per cent on the exchanges today. The scrip finished at Rs 52.80, a massive loss of Rs 6.80 over its previous finish.
On November 15, Union minister of shipping Ved Prakash Goyal had said no timetable has been fixed for the disinvestment of SCI and that the government, which holds around 80 per cent equity in the company, will sell its stake at the right time for the right price. Pointing out that the SCI scrip had plummeted from Rs 111 to Rs 58, he said it was better to wait for the right price.