Mumbai: The sale of Shipping Corporation of India (SCI) seems to be on track as Minister of State for Shipping Dilip Gandhi says the Indian government will invite bids for selling a strategic stake in the corporation by 20 October.

The government owns 80 per cent in SCI and is planning to sell a 51-per cent stake to a strategic investor. Dredging Corporation of India (DCI), meanwhile, will go in for an initial public offering, by January 2004.

Gandhi says the government expects to raise Rs 250 crore via this public issue. Two merchant bankers, Enam and Kotak Mahindra, have been shortlisted as advisors for the sale. The government, which holds 98.56 per cent in Dredging, is planning to offload 20 per cent through a public offer.

The SCI share is currently trading higher by 1.83 per cent or Rs 2.50 at Rs 139.35 with volumes of 1368636 on the Bombay Stock Exchange.

DCI chairman and managing director Neerav Gupta says his company is planning to form joint ventures (JVs) and special purpose vehicles (SPVs) with foreign companies for carrying out specific projects and is scouting for opportunities in the Middle East and Far East. "We are looking out for JVs and SPVs with foreign companies and are in the process of shortlisting consultants who will assist in the process."

He says DCI is in negotiations for maintenance of dredging contracts in the Middle East and Far East and will finalise a project by the beginning of the next year. The state-owned entity, which has 10 trailer-suction dredgers and two cutter-suction dredgers in its fleet, has floated a tender for trailer-suction dredger and will float another tender for the cutter-suction dredger by the yearend.

Gupta says the company has about 87-per cent share in the maintenance dredging and about 5-per cent share in capital dredging which it was planning to increase. "With new ports coming up, there was a lot of scope for capitive dredging in the country."

DCI is planning to introduce a voluntary retirement scheme for its 410 shore-based employees by the yearend and is in serious negotiations with the unions to reduce the crew per vessel to 22 from 39. DCI has retired a Rs 76-crore loan last year and has converted all its outstanding loans of Rs 120 crore into rupee terms to cut the risk of the volatility in the currency market.

Union shipping secretary D T Joseph says the government is studying the impact of the Supreme Court verdict in Hindustan Petrochemicals-Bharat Petrochemicals case on the divestment process of SCI.

SCI was incorporated in 1961 with the amalgamation of the Eastern Shipping Corporation and Western Shipping Corporation. The total fleet size of SCI in 1961 was 19 vessels. Ayanti Shipping company was amalgamated in 1973 with SCI leading to an addition of 16 ships. In 1986, Mogul Lines was amalgamated with SCI, adding 12 more ships.

"Though SCI was not formed by an Act of Parliament, companies including Jayanti Shipping and Mogul Lines were merged into it through Parliament approval," says Joseph.