"SCI had proposed to go in for a $100 million ECB to finance acquisition of four Aframax crude oil tankers of 110,000 dead weight tonnage (DWT) each, for which it has signed contracts with Hyundai Heavy Industries Co Ltd of South Korea," official sources said.

With the Cabinet Committee on Economic Affairs (CCEA) allowing Indian shipping companies to raise funds through external or domestic market borrowings for acquisition of ships, the way has been cleared for SCI's fleet augmentation plans, they said.

The company plans to fund the acquisition, costing over Rs 157 crore, at a debt-equity ratio of 70:30, sources said.

"SCI is currently negotiating with several foreign banks and financial institutions for the proposed ECB and was hopeful of raising the fund at rates below eight per cent," they said, adding on induction of these vessels into SCI's tanker fleet, the average age of tanker fleet would further reduce from the present 15.3 years.

The acquisition of Aframax carriers was aimed at augmenting SCI's crude tanker tonnage to meet the increased demand for crude oil transportation besides enabling SCI to cater to most of India's crude transportation requirements.

The state-owned shipping giant has already finalised $30 million ECB with ABN Amro Bank for financing the acquisition of one-second hand aframax oil tanker of about 89,000 dwt.

The ECB would finance 80 per cent of the vessel cost, while the remaining 20 per cent would be contributed by the SCI from its internal resources, sources said.