The Shipping Ministry on Tuesday said Shipping Corporation of India’s (SCI) does not need any bailout as its finances are sound as of now.

“There is no need for the government to step in to assist SCI because it has fundamentally financial strength and that it is capable of handling the current situation,” said Mr K Mohandas, Shipping Secretary, at a press meet here.

However, the top management of the Navratna company, which posted a Rs 5.9 crore loss in Q1, admitted to difficulties saying revenues and margins are under pressure and that the corporation has also downsized its capex plan to 10 vessels this fiscal from the 24 acquisitions announced last month.

Shipping Corporation Chairman and Managing Director, Mr S Hajara was quick to add that the grim situation is not unique to his company as the global shipping industry is hit because of oversupply and falling freight rates.

“At present, our margin, the revenue… everything is under pressure due to the very severe downturn in the industry,” Mr Hajara added.

An internal document of the Shipping Ministry had recently compared the company to the ailing national air carrier Air India and said it is “on the brink of financial collapse.”

The document further quoted the Ministry had also recommended SCI to go slow on its proposed acquisitions of 24 vessels saying it would to lose up to $200 million in value from the proposed purchases. The report had also cautioned that the company was getting into a debt-trap.

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