MSPL Ltd, a Karnataka based iron ore exporter, is diversifying into shipping business.

Mr Narendrakumar A Baldota CMD of MSPL LTD said that the company will invest INR 1,200 crore to acquire four post Panamax size ships.

Mr Baldota said that the first ship is to be delivered by the month end or in the first week of February and the second vessel in the next six months. Funding will be through internal accruals.

He said that the company has formed a wholly owned subsidiary in Singapore MSPL Diamond Maritime Pte Ltd to acquire the ships being built at Taizhou Sanfu Ship Engineering Co in China's Jiangsu Province.

Each of the four bulk carriers Indus Prosperity, Indus Fortune, Indus Triumph and Indus Victory will have a capacity of 92,500 DWT.

He said that with revenue of INR 1,845 crore in 2009 the company produced more than three million tonnes of iron ore products, which were mostly exported to China with marginal quantities sold in the domestic market.

According to Mr M Suresh Kumar vice president (Shipping and Projects) of MSPL Ltd, the company will charter its vessels on medium to long term fixed rate time charter basis. It will enter into time charter employment contracts for good amount of the fleet to provide fixed fortnightly payments in advance.

The combination of charters of the fleet will range from three to five months (short term range); one to three years (medium range) and six to eight years (long term range). He said that this will provide a stable cash flow and high utilization of assets and also mitigates the risk of seasonality in the spot market business.

(Sourced from BL)