Essar Shipping June-quater net soars, shares jump

Essar Shipping June-quater net soars, shares jump

Mumbai: Essar Shipping Ports & Logistics Ltd’s April-June net profit surged to Rs39.480 crore, propelling its share price as much as 20% to a 52-week-high.

The company’s issue of foreign convertible currency bonds (FCCBs) with an average conversion prices of Rs91.7 , was fully subscribed, a top official said on Thursday.

The six-fold increase in profit was led by gains in the sea transportation and logistics businesses, with both sectors contributing 33% of the revenues, managing director Rajiv Agarwal told reporters on Thursday. The company’s income from ports and terminals rose 93% during the quarter, and is likely to rise in the coming quarters.

Shares of the firm closed up 18.7% at 108.85 rupees a share, in a weak Mumbai market. Essar Shipping has a net debt of Rs7520 crore as on June-end, he said.

On Wednesday, Essar Shipping said it opened its FCCB to raise up to $280 million for subscription. It closed on Thursday.

“These funds, we will used for our expansion plans, that we earlier talked about," he said.

The two bonds carry a coupon of 5%. The $150 million bond has a maturing date of five years, and another, $130 million will mature in seven years. The FCCBs will be listed on the Singapore Stock Exchange, the company said in a statement.

On May 27, Essar Shipping said it will spend Rs4,875 crore in FY11 and expects its port business to drive growth during the year.