The crew of Sri Lankan and Burmese was rescued, they said, although some reports said one was missing.
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The 2,700 GRT (gross registered tonnage) MV Badulu Valley was reportedly carrying over 3,000 tonnes of rice from India when it sank near Chittagong's outer anchorage.
The vessel was built in 1983 and registered in Sri Lanka.
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She had collided with the tanker that had been anchored but the circumstances of the accident were not available.