The Great Eastern Shipping Company Limited CC-Nov25.pdf · 2025-11-10
Hi Shiv, thank you for taking my question. My question is not for the current quarter results but largely on financing. I wanted to better understand the benefits of converting the INR debentures into synthetic fixed rate USD loans. The reason I was drawn to this analysis was that broadly we know that the INR debentures are fixed costing around 8.5% and the synthetic USD loans come at, I reckon, around 6%. But if I take the amortized cost of rupee depreciation on the principa l until now, the Rs.300 crores t hat you were carrying till the end of March '25 and about 3.4% depreciation of the rupee for this fiscal, it adds to about 3.8% to 4% with still about four years to go. And then there is an increase in the rupee equivalent of the interest expense which is about 25% or about 1.5% on the 6% at the midpoint of this typically 10- year term. So, all in all, it appears to me that this synthetic conversion gives you an finance cost of about 11.3 % to 11.5% versus 8.5% if you had just left it without doing the conversions and of course there were bank charges. So, I just want to understand how you think about this and what are the benefits you get?
Got it. So, essentially, if the spread is very attractive enough, that is when you go for these structures, otherwise, you do not, that is my key takeaway.