Indian Steamships Seeks Corp Guarantee From Chambal Fert

Mumbai, Nov 2: | Updated: Nov 3 2003, 05:30am hrs
The buoyancy in the tanker and dry bulk sector has drawn Chambal Fertilisers & Chemicals to rush to the rescue of Indian Steamships Company Ltd (ISSL). ISSL is seeking a corporate guarantee of Rs 15 crore from Chambal Fertilisers and Chemicals to provide the necessary comfort to its prospective lenders.

NovaSoft Too Get Corp Guarantee

Chambal Fertilisers & Chemicals has also proposed to provide a corporate guarantee to NovaSoft Information Technology Corporation for an amount not exceeding Rs 10 crore or an equivalent amount in foreign currency.
The current borrowings by NovaSoft for its working capital are very expensive and the corporate guarantee would ensure that financing facilities are made available at attractive rates.

Chambal Fertilisers has sought the approval of its shareholders for the same through a postal ballot.

ISSL had revamped its business by acquiring an Aframax tanker at a cost of $13.3 million, which was part-financed through a foreign currency loan from ICICI Bank. The company had acquired a 1987 built 89960 DWT oil tanker on April 1, 2003.

ISSL now requires appropriate funding facilities to support its business plans and meet its working capital requirement. The shareholders nod to Chambal Fertilisers would ensure that the necessary financing facilities are made available to ISSL at an attractive cost.

Chambal Fertilisers holds a 50 per cent stake in Zuari Investment, which in turns holds a 61 per cent stake in ISSL. The remaining 50 per cent stake in Zuari Investment is held by Zuari Industries Ltd.

Zuari Investment was allotted 2.9 crore equity shares at par by ISSL for Rs 29 crore on preferential basis in December 2000.

The new acquisition of an Aframax tanker has taken the fleet tally to two tankers. This has enabled the company to turnaround its business by reporting a net profit of Rs 5.68 crore on a turnover of Rs 39.37 crore for the six month period ended September 30, 2003.