Varun Shipping Company Limited II - 1st A and B loan tranche

completed

Summary Of Project Information (SPI)Project NameIndia: Varun Shipping Company Limited - RegionAsiaSectorProject No007107Projected Board DateJanuary 2, 1996Company NameVarun Shipping Company LimitedTechnical Partner and/or Major Shareholders Varun is a publicly listed company on the Bombay Stock Exchange. Major shareholders are the Khatau family (26.0%), Unit Trust of India (9.0%), other Indian financial institutions (5.0%) and IFC (4.8%). The general public holds 55.2% of Varun’s shares.Project Cost Including proposed IFC investment Estimated project cost is up to US$73.5 million, including the investment in 5 secondhand vessels. IFC has been asked to consider an A loan, for IFC’s own account, for up to US$10 million; a B loan, for the account of participants, for up to US$20 million; and an investment of up to US$4.5 million in newly issued equity for a maximum of 5% of the Company’s shareholder capital, increasing IFC’s total shareholding to a maximum of 9.8%.Location of project and Description of site Varun is headquartered in Bombay in the state of Maharashta, India. Ships are trading on international cross trades, India-related import and export trades, and coastal trades.Description of Company and Purpose of Project Repeat Investment - Varun is one of India’s major private shipping companies, operating a fleet of 10 vessels in the product tanker sector, dry bulk sector and off-shore supply vessel sector. The project is to expand and diversify Varun’s fleet by acquiring 5 secondhand vessels, increasing Varun’s current tonnage of 206,306 DWT to approximately 315,000 DWT. This will enable Varun to participate in the expected increase in India-related trades and international cross trades. The investment program will also help to increase India’s shipping tonnage, which is an important goal of the Government of India.Environmental Category and Issues This is a category B project according to IFC’s environmental review procedures. Environmental issues associated with this project include air emissions, liquid effluents, spill prevention, hazard control, fire prevention, emergency response and marine safety. Varun will operate its new and existing vessels in accordance with all applicable International Maritime Organization (IMO) pollution prevention and safety standards, and its other operations in accordance with relevant World Bank policies, and general environmental, health and safety guidelines established for this project.The is December 14, 1995 from the Public Information Center.Date SPI sent to PIC December 1, 1995For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).