New Route

Mumbai, Aug. 14: Varun Shipping Company is planning to shop for funds. The company will seek shareholders’ permission to raise Rs 2,500 crore through domestic/ international offerings.

The company took this decision at a board meeting today. Although officials were not available for comment, sources said funds raised from the securities could be used to enhance Varun’s fleet strength.

The company, headed by the Khataus, has been in an aggressive expansion mode since the last few years. It had acquired three LPG carriers and two modern double hull crude oil tankers in 2005, while its subsidiary acquired one LPG carrier, involving an investment of around Rs 1,250 crore.

The Varun group owns and operates a diversified fleet of 19 vessels, comprising 11 LPG carriers, three product tankers, two crude oil tankers, one bulk carrier and two offshore supply vessels.

While Varun’s fleet of LPG carriers is the largest in India in terms of both fleet size and carrying capacity, it forms 76 per cent of the total LPG cargo carrying capacity in India.

However, Varun Shipping has recently been focussing on areas that are outside its traditional domain of being an LPG carrier. The company intends to expand its fleet of tankers and gas carriers and also enlarge its assets and operations in oil and gas exploration and production industry by acquiring ships worth $150 million.

Apart from approving a proposal to raise Rs 2,500 crore by issuing securities, the board of Varun decided to raise the FII limit to 49 per cent today.

The company was in the news earlier when it announced a plan to tap the Singapore markets by issuing Singapore Depository Shares.

However, after considering the then prevailing volatile stock market conditions, the company decided to launch the issue when the market conditions become more conducive.