SCI can overcome financial crisis, says shipping secy

Mumbai : The Shipping Corporation of India has been impacted due to a slowdown attributable to the global economic crisis, but it has the financial capacity to overcome the problem, India's shipping secretary K. Mohandas said Tuesday.

"As of now, Shipping Corp of India has the financial capacity to withstand this temporary crisis," Mohandas told ET NOW.

"There is an impact of the global slowdown, but then that's an economic reality that has to be accepted. But things are certainly not as dismal as some projections have come out," he added.

On Monday, shares of Shipping Corp of India hit a 52-week low after the Press Trust of India reported, quoting a government official, that the company was on the brink of financial collapse.

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"The company will be in the red from this year, if the interest income and income from sale of assets is excluded," Vijay Chibber, financial advisor and additional secretary in the federal shipping ministry told PTI.

Mohandas told the channel that Shipping Corp, with cash reserves of Rs 25,00 crore and debt-equity ratio of 0.66 percent, was well placed to come out of the downturn once the economic situation improves.

Shares of Shipping Corp, valued by the market at $714 million, are down 13.7 percent in the last two days on concerns about its financial health. On Tuesday, they ended down 4.6 percent at Rs 71.7.

Reuters