SINGAPORE An Iranian-led shipping venture is close to collapse after struggling to steer its oil tankers and dry bulk vessels past tightening Western sanctions, a senior company official said on Thursday.
Negotiations are underway between partners Shipping Corp of India and the Islamic Republic of Iran Shipping Lines (IRISL) on how to split the fleet and assets of Irano Hind Shipping, and whether the nearly 40-year-old joint venture will be shut down or not.
Western sanctions aimed at pressuring Tehran to halt its disputed nuclear program prohibit U.S. and European companies from doing business with Irano Hind Shipping due to its links with state-owned IRISL.
"Under the sanctions, we were finding it more and more difficult to employ these ships. So the decision was to split the assets," SCI's Chairman S. Hajara told Reuters by phone from Germany.
"Nothing has been settled yet on what will happen to the company. We are still working on it."
He said the assets of the venture, which includes four crude oil tankers and four dry bulk carriers, would be split according to the shares held by the parent companies. India's largest shipping firm, SCI, owns a 49 percent stake in the venture, while IRISL holds the remaining 51 percent.
The break-up is unlikely to have much of an impact for SCI nor IRISL, analysts said.
"Irano Hind was more of a political baby. The sanctions have in a way helped to discontinue it," said Shashank Kulkarni, secretary general of Indian Private Ports and Terminals Association.
"Business wise it didn't matter much to Shipping Corp of India."
SCI joins other Indian companies trying to distance themselves from Tehran. Indian refiners have cut oil purchases from Iran by more than a fifth, enough to win a waiver from U.S. financial sanctions.
(Additional reporting by Jonathan Saul in London and Siddesh Mayenkar in Mumbai, editing by William Hardy)