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Canadian billionaire Prem Watsa-led Fairfax-backed Seven Islands Shipping Ltd has filed draft red herring prospectus with SEBI to sell shares in an initial public offering to raise as much as ₹600 crore to fund a fleet expansion plan.
Seven Islands, India’s third biggest ocean carrier by capacity, was founded in 2003 by Captain Thomas Wilfred Pinto, a ship master, after sailing close to two decades. The firm is engaged in transporting crude oil and petroleum products along the Indian coast as well as in international waters. Its ships are registered in India and operate as Indian-flagged vessels.
FIH Mauritiuis Investments Ltd, a unit of Fairfax India Holdings Corporation, holds 48.54 per cent stake in Seven Islands.
In March 2019, Fairfax India Holdings Corporation had invested $72.1 million for a 41.4 per cent stake in Seven Islands Shipping which was later increased to 48.54 per cent.
₹200 crore OFS
The planned share sale comprises a fund raise via fresh issue amounting to ₹400 crore and an offer-for-sale (OFS) aggregating up to ₹200 crore by selling shareholders FIH Mauritius Investments aggregating up to ₹100 crore and promoter selling shareholder, Thomas Wilfred Pinto, aggregating up to ₹85.64 crore and Leena Metylda Pinto aggregating up to ₹14.35 crore.
The portion reserved for qualified institutional buyers will be up to 50 per cent of the offer, non-institutional investors to have up to 15 per cent of the portion reserved while up to 35 per cent will be reserved for the retail investors.
The net proceeds raised from the fresh issue are to be utilised to acquire one very large c rude carrier or oil super tanker and one medium range tanker from the secondary market with an investment of ₹352.43 crore.
Seven Islands runs a fleet of 19 vessels - 2 crude oil tankers and 17 petroleum product carriers.
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.
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