The Hindu Business Line : `Varun Shipping to raise Rs 2,500 cr in phases'

Varun Shipping has intentions of raising Rs 2,500 crore. It plans to expand its business and increase its FII limit to about 49 per cent. The company says that it plans to raise money in phases.

"This is not a one-time issue. It's an enabling resolution that we have passed. Money will be raised from time to time," says the company's Managing Director & Vice-Chairman, Mr Arun Mehta. Mr Mehta informs that they are also planning expansion in Hydrocarbon segment.

Excerpts from CNBC-TV18's exclusive interview with Mr Arun Mehta:

What is the choice of instrument for raising this money? You have said that it could be the domestic market or the international market, are you closer to taking a call on that?

This is not a one-time issue. It's an enabling resolution that we have passed. Money will be raised from time to time. We have also an enabling resolution for 49 per cent maximum cap on the foreign institutional investment.

Give us an idea then how much money do you see Varun Shipping would be requiring for its expansion plans over the next two years? How much money would you be raising at the earliest?

That is something, which we are working. We will be able to come out with our plans within the next two years.

We have already announced that initially $150 million would be invested in the next few months. Beyond that we are coming out with our plans.

What kind of expansion plans do you have? Are you looking at enhancing your fleet capacity?

We are planning expansion in the energy sector, hydrocarbon sector. We will be going in for LPG carriers, crude tankers of product carriers as well as offshore.

Currently, what is the fleet size? By 2007 and 2008 what would you like to enhance it to?

We have a fleet size of 19 at present. As far as the fleet size is concerned, it's not going by the numbers. We may have smaller number of ships, but the question is do they have better earning revenue, earning capacity or profitability. So it is not the age. We are slowly profiling towards the younger age fleet. Whatever new ones we are trying to buy, are the younger age vessels.