IPO-bound Seven Islands Shipping enters gas segment with $43 million VLGC buy

P Manoj Mumbai | Updated on September 08, 2021

Seven Islands Shipping Ltd (SISL), India’s second-biggest private oil tanker shipping company, has ventured into the gas transportation business by acquiring a very large gas carrier (VLGC) for about $43 million.

Seven Islands Shipping is backed by Indian born Canadian businessman Prem Watsa-led Fairfax India.

The 2006-built, 82,000 cubic metre capacity VLGC was purchased from New York Stock Exchange-listed Dorian LPG Ltd, one of the world’s top owners and operators of VLGCs.

The VLGC ‘Captain Markos NL’ has since been re-named as ‘Pine Gas’ and registered under the Indian flag, multiple sources said.

The VLGC adds to the fleet of 20 tankers comprising crude oil and petroleum product carriers with a combined capacity of about 1.1 million metric tons (MMT) owned and operated by Seven Islands Shipping. All SISL’s vessels are registered in India and operate as Indian-owned and flagged vessels.

Retail demand for LPG in India remained stable. India’s LPG imports have increased by 7% year-on-year since January.

India’s presence in LPG shipping is led by Shipping Corporation of India Ltd, Great Eastern Shipping Co Ltd and BW Global United LPG India Pvt Ltd, a unit of BW LPG Ltd, the world’s top owner and operator of VLGCs.

Seven Islands earn a big portion of its total revenue from three PSU oil firms – IOC, BPCL and HPCL with whom its ships are deployed on time charter and on spot contracts.

In February, SISL said it filed a draft prospectus with SEBI to sell shares in an IPO to raise as much as ₹600 crores to fund a fleet expansion plan.

The planned share sale comprises a fundraise via fresh issue amounting to ₹400 crore and an offer for sale of up to ₹100 crore by FIH Mauritius Investments (a unit of Fairfax India) and ₹99.99 crore by promoters Thomas Wilfred Pinto and Leena Metylda Pinto.

The net proceeds raised from the fresh issue will be utilised to acquire one Very Large Crude Carrier or oil supertanker and one medium-range tanker from the secondary market with an investment of ₹352.43 crore, it said at the time.

In March 2019, Fairfax India acquired a 41.4 per cent stake in SISL for $71.8 million through a direct subscription of $28.9 million and a secondary acquisition from existing shareholders of $42.9 million. In September and October 2019, Fairfax India acquired an additional 7.1 per cent from existing shareholders for $12.1 million, taking its total stake in SISL to 48.5 per cent.

Published on September 08, 2021

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