Essar Shipping Ltd. has chalked out plans to prolong its debt repayment obligation by extending the tenure of loans through negotiations with its lenders, a top company official said.
Negotiations ongoing“We are negotiating with lenders for prolongation of the loan tenure which will provide us comfort to service the loans. We are looking to enhance the loan tenure from 8 years now to 20 years depending on the life of the asset,” Captain Anup Kumar Sharma, Managing Director, Essar Shipping told The Hindu .
Seventy-five per cent of the loans are overseas borrowings which are likely to be restructured through easier repayment terms. The company has a term debt of Rs.3,000 crore.
“The shipping industry underwent a very bad phase in the past few years and is yet to recover. This created a problem for the whole industry, including us,” he said.
Essar Shipping reported a loss of Rs.114 crore for the financial year 2015-16.The company has 15 vessels in its fleet including bulk carriers and VLCCs (Very Large Crude Carriers), and over 60 per cent of the capacity is deployed for group entities such as Essar Steel and Essar Oil. Four more bulk carriers currently being built by ABG Shipyard will join the fleet within two years and this involves an investment of $100 million (about Rs.670 crore). There has been no plan to place any new order as of now, Captain Sharma said.
“We are open to acquisitions of distressed sale assets to enhance the fleet strength provided we get a good deal,” said Captain Sharma.
