Struggling for survival,shipping firms have asked the government to allow a tax free bond issue similar to the INR 5,000 crore infrastructure one for the ports sector.
Mr Anil Devli CEO of Indian National Shipowners'Association said that"We have specifically asked the government to permit State Bank of India or somebody to come out with such a foreign currency bond,to develop tonnage."
An industry official said that close to half of the tonnage in India is over 20 years old and will have to be phased out in the next five years.Insa has 37 members,with a combined gross 9.08 million tonnes,representing 86 per cent of total Indian tonnage.
Mr Devli said that"We want the government to back this bond,as shipping companies have no assets left with them.The government will have to stand guarantee and help us raise this money."
However,the infrastructure bond for the port sector was a rupee bond and this is where the demand for the shipping companies differs.Hence,he said that"We are asking them to back a company like SBI,etc,which can raise foreign money for us."
Most Indian shipping firms are highly leveraged and do not have any appetite left to raise money on their own.
Source-Business Standard