Mercator Lines may raise $200-300 mn via FCCB/GDRs

Mercator Lines has announced its Q3FY08 (YoY), standalone results. The company’s net sales at Rs 196 crore versus Rs 183 crore, while its OPM are at 16.3% versus 14%. 

Speaking to CNBC-TV18, Harish Mittal, CMD, Mercator Lines said that the company plans to raise USD 200-300 million through FCCB and GDRs. The last quarter would be the best quarter for the company this year, he said.

Excerpts of CNBC-TV18’s exclusive interview with Harish Mittal:

Q: Good growth and margin expansion seen in this quarter. What has led to this growth and what are the current charter rates that you are witnessing?

A: The current charter rate is good. Of course in dry bulk, it has gone very high to a fairly good rate and in tankers too, the rates are fairly good.

Q: What are the expansion plans at this point in time with regard to fleet?

A:  This year, during 08-09, we will have a fairly good expansion plan. We are planning to raise some funds in the form of FCCB or maybe GDR.

Q: How much are you looking to raise?

A: That depends on the market, but anything between USD 200-300 million.

Q: Your two units Mercator Oil and Gas and Mercator Petroleum, throw more light on what these units are really into?

A:  They are basically made for offshore activity, offshore business. As of now, there is no business, but we are trying to develop some offshore segments like in drilling or maybe some assets also. But basically, they are a 100% subsidiary of Mercator Lines India.

Q: So you are looking to raising this USD 250-300 million for investment in these two verticals, what will be their capex requirement?

A: No, that is in Mercator Lines India. Then we will think that where to use this money either in offshore or maybe in tanker.

Q: Your outlook on freight rates and what sort of rates have you witnessed this quarter?

A: The last quarter should be one of the best among all these four quarters. Quarter-to-quarter we were expecting better results because last year our expansion was in a phased manner and freight rates are also quite good. So we are expecting a fairly good quarter, I mean the last quarter.