Shipping Corporation of India (SCI) is one of the candidates for government buyback of shares. However, S Hajra, chairman and managing director of the PSU says that approval for a buyback is not on the board's agenda yet. "The buyback plan has not been finalized," he says.
With slowing growth and lesser exports, the shipping industry in India had come under pressure during the first half of the year. Hajra is confident of better times going into the next half. "I don't expect outlook for shipping to deteriorate further in H2FY12," he says. Below is the edited transcript of the interview. Also watch the accompanying video. Q: Have you heard anything from the government on its buyback plan? Currently what is the cash on the books for your company? A: There have been some indications that government is thinking about when they should be generating funds through buyback of shares by PSUs. I have also read in the newspaper that SCI is very much in the list. Our cash surplus is hovering in the region of Rs 1,900 crore or thereabouts. It is just below the 50% turnover figure. Turnover is different every year but it is around Rs 4,000 crore. So, the exactly date that is reckoned will the important thing because because just a few months back we had a cash surplus of about Rs 2,400 crore. If that figure is taken then we are above 50% but at the moment it has come down to about Rs 1,900 crore. The board has not even considered this matter so it is far too premature for me to say how this will shape up. We do have cash surplus but we also do have an ambitious acquisition plan. We have about 27 vessels on order and substantial equity component of that will be required to be generated from our cash surplus. The shipping is going through a lean phase so the internal research innovation is expected to be down for sometime. We would like to have an adequate buffer with us for quite sometime in terms of cash which is looked very positively by our lenders particularly foreign lenders. SCI having reasonable cash is always taken as a very positive sign. So, we would like to conserve as much as cash as possible with us. However, I would not be able to give a very specific comment about the companyDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
