Indian insurance cover inadequate, says Company
Great Eastern Shipping Company has suspended voyages to Iran as the protection and indemnity insurance cover offered by the Indian insurer is inadequate, Chairman K.M. Sheth told shareholders on Thursday.
The United India Insurance Company agreed to offer a cover of $50 million per ship as against the $1 billion cover provided by the International Group of insurers, Sheth said, responding to a question from a shareholder at the company’s annual general meeting.
The international P&I Clubs cut off their cover for ships carrying Iranian cargo from July 1 following the European Union sanctions against Iran over its nuclear programme.
Sheth said the Great Eastern has a contract from MRPL for carrying crude from Iran. In the absence of adequate insurance cover, the company informed MRPL that it would not be able to carry the cargo from Iran. The public sector MRPL is the largest Indian importer of crude from Iran.
He said shipping market has been extremely weak and given the current global economic environment, a recovery is unlikely in the near future. The asset prices also declined substantially and the company is looking for opportunity to acquire assets using the cash surplus of about Rs 3,400 crore, he said.
Referring to the offshore services subsidiary — Greatship Ltd, he said the company will get the third rig by January and it will be given to ONGC on a five-year contract. The company has no immediate plan to list the offshore services subsidiary, he said answering another question. The company has recently acquired a 1990-built gas carrier which is expected to join its fleet in the second quarter.
The company reported Rs 99.56 crore net profit for the quarter ended June 30, 2012 as against Rs 101.90 crore during the same period last year . Consolidated profits for the three months increased to Rs 180.99 crore from Rs 162.59 crore. Income from operations increased Rs 640.57 crore from Rs 524.60 crore.
During the quarter, the company sold two vessels — a product carrier and an LPG carrier.