Essar to invest $2.5bn to expand facilities

Essar Shipping Ports & Logistics plans to invest more than $2.5 billion (Dh9.17bn) over the next three years to expand its port and shipping capacity and add rigs.

The company will raise 30 per cent of the total amount through internal accruals and the remaining will be raised from a consortium of banks including ICICI, SBI, NIBC Bank and Halifax.

"The money has been raised through debt and internal accruals," Managing Director Sanjay Mehta said at an analysts meet.

The investment is expected to add $900 million in annual contracted revenue, he said.

Of the total capex, the company would spend $440m to add two jack-up rigs and take its total rig fleet to 15.

The orders have been placed with ABG Shipyard Ltd and the first will be delivered by October 2010 and the second by January 2011, Chief Financial Officer V Ashok said.

The firm would be spending about $1bn to add 14 ships to its existing fleet of 24 vessels, by 2011, Ashok said. The company posted a turnover of $557.75m in 2007-2008, reflecting a 33 per cent rise in revenues over last year. Its earnings before interest, taxes, depreciation and amortisation went up 107 per cent to $193.65 million.