COLOMBO : As Shipping Corporation of India’s privatisation plans get delayed, US based Safesea, one of the bidders shortlisted to bid for the Indian-government owned vessel operator, has turned its attention to Ceylon Shipping Corporation, a government of Sri Lanka-owned company and has made a proposal to acquire a 40% stake in the company by entering into a JV, according to sources.
As per the proposal of Safesea, Ceylon Shipping Corporation could be run in a public-private partnership model.
Sources familiar with the contents of the proposal said that Safesea has proposed that it will hold a 40% stake in Ceylon Shipping Corporation while the Sri Lankan government will hold another 40% stake. It has proposed that 20% stake will be offloaded to public investors.
No financial aspects have been mentioned in the proposal because the talks are said to be preliminary.
Safesea confirmed it has made an investment proposal to Ceylon Shipping when contacted.
“We have received Safesea’s proposal. It is in the interest of the company. But we will have to approach the relevant ministry for taking it forward,” said WS Weeraman, Chairman of Ceylon Shipping Corporation.
Safesea had submitted an expression of interest to acquire Shipping Corporation of India in March last year. It was amongst shortlisted bidders for the company and was allowed to carry out due diligence. It is yet to submit a financial bid for the company because the government of India indefinitely extended a January 18 deadline for submission of bids for the state-owned vessel operator.
Ceylon Shipping Corporation was established in 1971 and has been a key player in transportation of goods from Sri Lanka. As the country has a deep and wide port, it has been a favoured route for ships transporting goods across continents. The company is seen as an attractive target because it can offer feeder services and port-related logistics services to global shipping lines.
However, the company is facing a financial crunch and has been short of cash to run its operations.