Monday, August 11, 2008
By Staff Writer on Monday, August 11, 2008
State-owned Oman Shipping Company (OSC) is aiming to raise $4 billion (Dh14.69bn) by year-end to finance its proposed fleet expansion programme, according to a senior government official.
The company is looking to add between 15 and 20 refined product tankers to its fleet in order to cope with the increasing demand for energy transportation.
The raised amount will be partly used to finance existing vessels already on order and to purchase more ships.
OSC's major stakeholders include Oman's Ministry of Finance and Oman Oil Company.
Ahmed Al Abry, COO of BankMuscat, said: "The amount was too big for local financial institutions to wholly finance the deal but added that a collaboration could be made with foreign banks to raise the money."
BankMuscat, Oman's largest lender would 'go for the role of a lead arranger' on the deal.
Part of OSC's multi-billion dollar expansion includes an order to build 10 very large crude carriers (VLCC), chief financial officer Kuldeep Mathur said earlier.
In February, OSC placed two separate orders with South Korea's Hyundai Heavy Industries, the world's largest shipbuilder, to build five supertankers, and with Daewoo Shipbuilding and Marine Engineering Company to build another five VLCCs.
The deals were valued at about $770m each.
Financing for the company's fleet expansion could likely come via loan arrangements from the North Asian institutions, Japan Bank for International Co-operation, Korea Export Insurance Corporation, or European banks like BNP Paribas and Societe Generale, Mathur said.
Oman Shipping Company is a closed joint stock company incorporated in May 2003. It is owned by the Government of the Sultanate of Oman through Ministry of Finance (80 per cent) and Oman Oil Company SAOC (20 per cent).
OSC was incorporated by the government to use its own fleet to export Omani products, to get involved in the whole LNG value chain and to develop shipping industry in Oman as one way of creating jobs.
At present, OSC has invested in six LNG ship-owning companies.
Six LNG vessels are in operation. Other than LNG vessels, the company has recently invested in owning a product tanker with Mitsui OSK Lines and is looking into expanding and diversifying its fleet of VLCCs, Product Tankers, Petrochemical Carriers, Bulk Carriers, LPG Tankers, Methanol Tankers and Containers.
Last year, OSC, UAE's Vitol International, part of Vitol Group, and Oman International Trading Company (OITC) signed memorandums of understanding in Dubai to form a joint venture (JV) to transport methanol from Salalah Methanol Company (SMC).
Under the JV, which is 80 per cent owned by Oman Shipping Company and 20 per cent by Vitol, three tankers would be bought and leased to Oman International Trading Company for 15 years for transporting methanol.
The UAE was the leader among countries trading in non-oil products with Oman during the first quarter of this year as the sultanate's foreign trade experienced a 50.4 per cent rise in the total value of commodity exports to Dh30.72 billion as of the end of March, compared to the same period in 2007.
Posted by Directory Insurance at 5:23 PM