Essar Shipping monetises its fleet of vessels; Stock gains over 1%

10 Feb 2022 , 12:16 PM

Essar Shipping Ltd. hereby intimates that, in line with the approval granted by the Shareholders, it has monetized its fleet of vessels. The proceeds of the vessels are being utilized to reduce the debt to its secured lenders. As the Baltic Dry Index hit a 10 year high in 2021, making it the most appropriate time in order to reduce its debt.

The company said in a filing that with this monetization and upon satisfaction of other conditions, Essar Shipping Ltd.’s obligation to its lenders will reduce by approx. Rs1,100cr.

The Baltic Dry Index hit its decade high of 5,650 points in October 2021. Accordingly, it was felt that this was an appropriate time for Essar Shipping to monetize its vessels and fetch the best price in order to maximise valuation and reduce debt accordingly.

With ESL achieving its task of monetisation of assets to reduce its liabilities, the company is now looking at appropriate opportunities for a future business built up. ESL’s experience of 40+ years in marine transportation and logistics will be a pillar of strength to chalk out future business strategy.

At around 12.18 pm, Essar Shipping Ltd was trading at Rs9.92 per share up by Rs0.11 or 1.12% from its previous closing of Rs9.81 per share on the BSE.