According to sources, informal offers have been made by these companies since this will help them in consolidating position in the shipping business. Moreover, SCI stake will also help the foreign companies to enter the coastal shipping business through feeder ships. At present, foreign vessels are debarred from coastal waters. They are allowed entry only in cases where Indian flag vessels are not available.

Therefore, the decision of sale of strategic stake will also involve policy decision on coastal shipping.

The Cabinet Committee on Divestment (CCD) had recently granted in-principle approval to SCI divestment. The exact nature of divestment for the Rs 2,500-crore shipping giant is yet to be decided.

One of the routes being explored is offloading part of the 40 per cent government stake in favour of a strategic partner. This can also mean that SCI's container business is hived off to the private player.

The government holds 80 per cent equity in the company. About 18 per cent equity was offloaded in favour of financial institutions and 2 per cent to retail investors in two tranches in 1992 and 1993.

The erstwhile disinvestment commission had recommended that Indian Oil, Hindustan Petroleum and Bharat Petroleum besides public sector refineries pick 40 per cent stake in SCI in proportion to their net profits. However, with the oil companies showing little interest, the ministry of surface transport and the department of divestment are thinking of other options.

There was also a proposal to make equity offer to small investors and employees through a retail issue. SCI's present authorised capital is Rs 450 crore and the subscribed andpaid-up capital is Rs 282.3 crore.

P&O has already established itself as a formidable player in the port sector with the company operating the Nhava Sheva International Container Terminal at the Jawaharlal Nehru Port Trust, bagging the Rs 300-crore container terminal project at Kandla and likely to get container terminals at Vallarpadam, near Kochi port, and Chennai.

With container facilities at Port of Qasim in Pakistan and Colombo port as also Sydney and Melbourne facilities in Australia and Manila in the Philippines under its operation, P&O controls business on vital sea routes. SCI stake will help it further consolidate position on the Indian west coast.Maersk Sealand is the container liner of Danish group AP Mollar. The group also has strong presence in the bulk carrier and tanker business.

The $11-billion Canadian Pacific group, with seven container shipping companies and 75 vessels, is the sixth largest container shipping group in the world carrying 2 million containers per year.

One of its group company, Contship Containerlines, recently launched a direct service to the United States.