State-owned Dredging Corporation of India is talking to some cash-rich ports to raise money for buying two 9,000 cub mt capacity dredgers at a cost of about Rs 1,200 crore.
With 60 per cent of its fleet of 15 dredgers over 20 years old, the firm is looking to replace its aged assets to improve overall productivity.
“We are trying to work out an arrangement with some of these ports under which they would provide a part of the funds for the new dredgers and we would pay them back through dredging of the ports,” D.K. Mohanty, Chairman and Managing Director, told mediapersons here today.
He said there was a positive response from some of these cash-rich ports, which also required significant maintenance dredging on a regular basis. These ports include Paradip, Kandla, Visakhapatnam and JNPT.
The company came out with a public issue of tax-free bonds on Friday to raise up to Rs 500 crore to finance acquisition of one of the three 5,500 cub mt capacity dredgers it has on order. The first of these was received last year, while the second is expected to join the fleet in June this year and the third in January-February 2014.
While the first two of these dredgers are being procured through ECB borrowings, it has chosen the bond route to finance the third, although the coupon rate is slightly higher than the ECB interest rate. Each of these vessels costs about Rs 550 crore.
Apart from trying to raise money through ports, DCI would also consider euro loans to finance the two new dredgers, Mohanty said adding, “We currently have a debt of about Rs 550 crore and our networth is about Rs 1,400 crore. We have some headroom to raise funds.”