Changes afoot for Indian ship finance

Changes afoot for Indian ship finance

India could face a dramatic change to its ship financing landscape with the Export-Import Bank of India planning to establish a Maritime Financing Facility (MFF) at the International Financial Services Centre (IFSC) in Ahmedabad, in association with commercial banks. The move is intended to get Indian shipping firms to go for special purpose vehicles (SPVs) when financing deals.

Yaduvendra Mathur, chairman and managing director of India’s Exim Bank told local media: “Instead of borrowing on the books of companies to build ships, ship-specific bonds can be floated. Actually, people will invest in ship-specific bonds. So, there will be an exposure of people only to a particular ship. These are innovative financing structures. We have been talking to a few merchant bankers on how the maritime activity can kick-start the whole economy,” explained Mathur.

Noting that only 5% of India’s trade is carried on India-made ships, the Exim boss said it was vital to make India’s shipbuilding industry stronger.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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