Shipping Corp to use $22.48m insurance money as capital expenditure

Highlights

• "Banglar Samriddhi" suffered a missile attack in Ukraine last year
• The compensation was added to the corporation's bank account on 21 March
• The corporation acquired "Banglar Samriddhi" in 2018
• Ukraine closed its ports following Russia's invasion on 24 February.
• On 2 March, a rocket struck the stranded vessel, killing one of the sailors

The Bangladesh Shipping Corporation – a state-owned oceangoing vessel management authority – has finally received $22.48 million in insurance claims for "Banglar Samriddhi", a cargo vessel that suffered a missile attack in Ukraine last year.

Now, it will invest the fund as capital for its ongoing development works, according to Mohammad Ashraful Amin, general manager (admin) of the corporation.

On 21 March, the compensation against the vessel abandoned at a Ukrainian port was added to the corporation's bank account.

The Shipping Corporation got the funds from the Sadharan Bima Corporation, the primary insurer of the ship.

Reducing risks, the state-owned non-life insurer had reinsured the ship with Lloyd's of London broker Tysers.

Earlier this month, the Sadharan Bima Corporation got the insurance claim from the reinsurer firm to its account, and after completing the procedure, it transferred the amount to the shipping corporation's account.

According to a source, in 2018, the Shipping Corporation acquired the ship for its fleet, and the cost was Tk204 crore under a loan agreement with China.

But Ukraine closed its ports following Russia's invasion on 24 February. On 2 March, a rocket struck the stranded vessel, killing one of the sailors.

The Shipping Corporation rented Banglar Samriddhi to a Danish firm Delta Corporation.

The bulk carrier arrived in Ukraine on 22 February 2022. The ship was supposed to take ball clay from the port before travelling to Italy.

Rescuing the sailors, the ship was abandoned, and is yet to be rescued as war is continuing.

Ashraful Amin said, "Insurance claim money has been added to the company's account on 21 March, which will be spent on the ongoing development work of the company."

"The corporation has recently undertaken some other development works, including the purchase of ships, modernisation and construction of buildings. The insurance money will be invested here."

"Investments will be made in the company's business expansion," he added.

After experiencing colossal growth in the business through riding on new ocean-going ships, the Bangladesh Shipping Corporation last year decided to expand its fleet with another four vessels at a cost of $241.92 million for future prospects.

As per the decision, the four ships – two crude oil tankers and two bulk carriers – will be procured from China under a government-to-government agreement.

After Banglar Samriddhi got damaged in the missile attack in Ukraine, the Shipping Corporation now has seven oceangoing ships in its fleet.

In fiscal 2021-22, the total revenue of the Shipping Corporation was Tk517 crore, which was 88% more than in the previous year, while net profit increased by 213% to Tk225 crore.

It had paid its shareholders a 20% cash dividend.