Great Eastern Shipping Company, the largest private shipping company in the country, has decided to sell three very large crude carriers under construction at Hyundai yard in South Korea as the company believes the freight outlook for VLCCs to remain weak and returns may not justify investments.

The contract value of these three vessels could be over $300 million.

The company said on Friday, that it has entered into an agreement to sell the three VLCCs of 318,000 DWT each immediately on delivery from the yard. The vessels were scheduled to be delivered between January and April 2012.

“We do not expect a major recovery in the VLCC segment, though the rate may not remain at the current low levels (around $15,000 a day) for long,” said a Great Eastern Shipping official.

The company now wants to focus on the offshore segment, which according to the official looks promising. “We have made some investments in the offshore sector in the last few months (in rigs and OSVs) and we want to add to our capacity,” he said.

“It's just a portfolio rejig, the company has enough funds. We have cash surplus of over Rs 500 crore,” he said.

The company has not revealed the value of the vessels on order. According to analysts, this size of vessels should cost $100 million-110 million each.

GE Shipping's wholly-owned subsidiary, Greatship (India) postponed its IPO plan last year due to bad market conditions.

Originally, Great Eastern had placed orders for two Suezmax vessels, which were to be delivered in 2011. However, in March 2010, the company had changed the order to VLCC instead of the bulk carriers. With the exit of this contract, company's current new order came down to three dry bulk carriers – one supramax and two kamsarmaxes.

On Friday, the company scrip on BSE closed marginally lower at Rs 278.80.

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