Seven Islands Shipping Ltd, backed by Indian born Canadian businessman Prem Watsa-led Fairfax India, has purchased a second-hand oil products carrier, its third acquisition in less than four months, for an undisclosed amount.
The initial public offering (IPO)-bound Seven Islands Shipping took delivery of the medium range, 45,761 tonne-capacity oil products tanker, in Singapore on Thursday, company officials said. The Hong Kong-registered tanker has since been registered under the Indian flag and named ‘Marvels’.
With the acquisition, Seven Islands Shipping runs a fleet of 23 ships, comprising 18 oil products tankers, three crude tankers and two LPG carriers. In September, India’s second-biggest private oil tanker shipping company acquired two liquefied petroleum gas (LPG) carriers to tap the growing demand for LPG imports into India.
In February, Seven Islands Shipping said it filed a draft prospectus with the Securities and Exchange Board of India (SEBI) to sell shares in an IPO to raise as much as ₹600 crore to fund a fleet expansion plan.
The planned share sale comprises fundraise via fresh issue amounting to ₹400 crore and an offer for sale of up to ₹100 crore by FIH Mauritius Investments (a unit of Fairfax India) and ₹99.99 crore by promoters Thomas Wilfred Pinto and Leena Metylda Pinto.
Also read: Fairfax-backed Seven Islands Shipping expands LPG fleet with medium size carrier
The net proceeds raised from the fresh issue were intended to acquire one very large crude carrier or oil supertanker and one medium-range tanker from the secondary market with an investment of ₹352.43 crore, it said at the time.
In March 2019, Fairfax India acquired a 41.4 per cent stake in Seven Islands Shipping for $71.8 million through a direct subscription of $28.9 million and a second acquisition from existing shareholders of $42.9 million. In September and October 2019, Fairfax India acquired an additional 7.1 per cent from existing shareholders for $12.1 million, taking its total stake in Seven Islands Shipping to 48.5 per cent.
Seven Islands earn the bulk of its revenue from three state-run oil firms – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – with whom its ships are deployed on time charter and spot contracts.