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Mercator prunes long-term debt to Rs 1,416 cr in FY17

The Company’s long-term debt was reduced by 34% from INR 2,139 crores to INR 1,416 crores in Financial Year (FY) 2017, said Mr H K Mittal, Chairman, Mercator Ltd at the 33rd AGM of the company on 15thSept . Further, with efficient management working capital is also now lower at around INR 423 crores, he said. ‘Going forward de-leveraging will continue to remain our one of our key strategic priority. On the Business front, your company’s shipping & dredging division continues to deliver satisfactory results’, he added .

Dubbing FY17 as a transformational year for the company, Mittal, said, ‘Towards the beginning of last year, we successfully reorganised our business to focus on 4 key verticals – Dredging, Shipping - that is Oil Tankers, Coal and Oil and Gas. We continue to maintain our focus on generating better returns and to that extent our adjusted EBITDA grew to Rs 656 Crore, compared to Rs.538 Crore last year. We have successfully completed our QIP issue, which was fully subscribed by marquee Qualified Institutional Buyers including the Govt of Singapore. Your Company successfully completed the sale transaction of MOPU was in February 2017. This not only reduced the debt of the company by around INR 500 Crores but also significantly reduced the geographical and credit risk attached to the contract’.

In shipping, Mercator has secured a time charter contract of around INR 120 crores for MR tanker for a period of 4 years, commencing in January-2017. Currently the focus of the management is towards operational efficiency, maintenance of fleet & strategic capital allocation to create superior shareholders return. Dredging, today, the company is strategically positioned to benefit from Government of India’s vision to make India a global transhipment hub and enhanced used of inland water ways for more efficient transportation. Inland waterways development represents a huge opportunity for the dredging business. As one of the largest private sector dredging company in India, its extensive experience would surely help us get a slice of this business, the Chairman said.

Pipelines for upcoming contracts is strong and growing. ‘Our Coal Mines Assets in Indonesia continue to perform well. We have strategically focused on improving productivity and cost optimisation. We have achieved a record 1.7 mil ton of production and 4.3 mil of total throughput last year Exploration activities in our Oil Assets in Cambay continue to progress well., We have recently announced that the Director General of Hydrocarbons (DGH) has reviewed the discoveries from MPL’s first two wells, Jyoti #1 & Jyoti #2, in Bharuch Area of Gujarat and concur that the discoveries are commercially viable. We have commenced preparation of a detailed Field Development Plan (FDP) and will be submitting it to the DGH soon. MPL aims to start production from the wells once FDP is approved by DGH and all the statutory clearances are obtained. These are Tier 1 Oil Assets and the crude is light sweet.

The assets are also located under 20 kms from the closest refinery, thereby no major evacuation infrastructure is needed. Our oil and gas business will lead your group to huge growth potential in coming years! The market cap for Mercator Limited has increased by 129% from Rs. 549.78 Crores as on 31st March 2016 to Rs. 1,259.05 Crores as on 31st March 2017’, he said.

Non-core assets’ exit boost mkt cap

The rise in the market cap could be attributed to company’s prudent exit from the non-core assets, deleveraging of the overall debt and the positive outlook for the overall business across divisions. Mercator strongly believes that Corporate Social Responsibility as a philosophy and approach can help bring together different sectors of the society and provide equal opportunities for development. As a responsible Corporate; Mercator always endeavours to adopt responsible social business practices.

CSR ahoy!

“Prem Punita, our CSR wing undertook several initiatives this year like Health camp, Wheelchair distribution for the physically challenged, Adult Literacy Course, Skill development program and many more for the betterment of the society. Across our operations, safety, environment and health come first and we are strongly committed to ensure that our operations are safe and free of any risks or hazards. We employ best-in-class standards and ensure our teams have the correct capabilities and knowledge to be better prepared for evolving business challenges. In closing, I am very confident and excited about this phase in our Company. The multiple growth opportunities combined with our strong leadership and management teams make us ready for the next wave of growth” beamed Mercator top brass.

 


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