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Konig & Cie looking to set up KG fund in India

Konig & Cie looking to set up KG fund in India

Mumbai: Hamburg-based shipping investment firm Konig and Cie has targeted the lucrative Indian market for its next shipping fund. "We are looking to set up a shipping-focused fund, which could be as much as $500m, for India," Tobias Konig (pictured), md of Konig and Cie told Livemint in an interview during a recent visit to Mumbai.

The Indian fleet is due to undergo a major rehaul in the next two years as IMO regulation requiring all liquid carriers to be double hulled. The Indian National Shipowners' Association estimates that the country requires $20bn in investment in order to boost its flagged tonnage to 20m gt and retain its 13% share of international cargo carried over the next two years.

'As of August, the strength of our fleet comprises of 886 ships of 8.92m gt/14.60m dwt, up from 821 ships of 8.99m gt/14.98m dwt a year ago,' INSA president Sabyasachi Hajara who is also chairman and md for the Shipping Corporation of India told SeatradeAsia-online. 'We crossed the 9m gt mark in February this year and I expect that we will cross the 10m gt mark in the near future,'

This is a particularly likely scenario in light of the Rs2,000 crores ($470m) set aside to buy ships in the tonnage tax reserve over the past three years.  According to the association, additional funds from bank borrowings leveraged against this amount give Indian owners Rs8,000 crores ($1.8bn) in funds committed to ship acquisition.

Konig and Cie plans to raise money for the fund from both retail and institutional investors. It is yet to decide whether to locate the India-focused fund within the country or offshore.  [31/10/08]