The government is inviting offers by April 30 from companies interested in taking over the ailing private sector shipping company, Scindia Steam Navigation Co.
The government expects the buyer not only to run Scindia efficiently and profitably, but also to assume responsibility for repaying liabilities.Scindia has been in the shipping business since 1919 and has a fleet of 13 ships and two subsidiaries - Scindia Workshop Ltd., a ship repair company, and Eastern Bunkerers Ltd., which provides stevedoring and related services.
The company almost closed four years ago with losses of more than 900 million rupees (US$48.6 million). It has outstanding government loans totaling 1.8 billion rupees.
The line is managed by a board appointed by the government, and its sale is being handled by state-owned Shipping Credit & Investment Co. of India.
Shipping Credit & Investment has prepared a rehabilitation package for Scindia that will be extended to the buyer.
Several Indian companies have shown interest in acquiring Scindia. It has high-value property in Bombay and liner routes to the United Kingdom and Black Sea.
Among those expressing interest are state-owned Shipping Corp. of India and privately owned Essar and Great Eastern Shipping Co.
A group of shareholders led by Scindia's chairwoman emeritus, Sumati Morarjee, also may bid.
Reports Monday from Bombay said a condition that every offer be backed by a corporate or bank guarantee for 1.8 billion rupees irked several interested parties. They feel the present market value of Scindia's assets does not exceed 1.4 billion rupees.
Essar last month won control of South India Shipping Corp., with a fleet of nine bulk carriers totaling 286,000 deadweight tons.
South India Shipping is a cash-rich company with free reserves amounting to 265 million rupees, almost five times its equity capital. It announced a dividend of 40 percent in 1989, its first in seven years.
Its 12-month results through last Sept. 30 showed freight and hire earnings of 730 million rupees, up 27 percent over the previous year.