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Essar Shipping to invest $1 billion in fleet expansion

10 Jan 2011 Evaluate

Essar Shipping Ports and Logistics Ltd (ESPLL) is in the process of investing $1.1 billion to acquire 12 new vessels and two jack-up rigs in the next two years, despite projections of another year of choppy freight market in 2011-12. This fiscal, the company is acquiring two cape size vessels at a cost of $20 million each, one of which has already been received and the second expected to join Essar's fleet next month.

ESPLL is in the process of demerging its ports and shipping businesses into two separate entities. While the existing company will be renamed Essar Ports, the new entity, Essar Shipping, which will handle its shipping, oilfield services and logistics businesses, is expected to get listed a month after the demerger process is completed by February.

The company, which operates a fleet of 26 vessels, including two tankers, with a total tonnage of 1.4 million DWT, is expecting revenues of about Rs 2,700 crore from its shipping business this fiscal, an increase of about 30 per cent from last fiscal. Its shipping business derives about 38 per cent of its revenues from Essar group companies and the remaining from third party charters. With the acquisitions, the share of revenue from group companies is expected to nudge up to 59 per cent next fiscal.

Essar Shipping Share Price

27.79 0.62 (2.28%)
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