By IANS,
Ahmedabad: Essar Shipping, Ports & Logistics Ltd (ESPLL) Thursday said the Gujarat High Court has approved its scheme for the demerger of its shipping, logistics and oilfield services businesses.
This demerger will create two separate entities – Essar Ports Ltd (the existing ESPLL) and Essar Shipping Ltd (resulting company), both of which would be listed on the National Stock Exchange and the Bombay Stock Exchange, according to a company statement here.
The scheme which becomes effective only after certain statutory formalities are completed also includes merger of two wholly-owned investment subsidiaries into ESPLL.
ESPLL CEO and managing director Rajiv Agarwal said that since both companies have now attained a critical mass and substantial growth plans are in the pipeline, there is need for focused management and this demerger will help them grow rapidly.
The ESPLL board had Aug 12, 2010, unanimously decided to demerge its shipping, logistics and oilfields businesses into a separate entity.
Under the scheme, ESPLL will transfer its shipping, logistics and oilfields services businesses to its existing wholly-owned subsidiary (the resulting company). The resulting company will issue one equity share of Rs.10 face value, each credited as fully paid-up, to the shareholders of ESPLL for every three equity shares they hold in ESPLL as of the record date.
The company has a port capacity of 76 million metric tons per annum (MMTPA), which includes 46 MMTPA at Vadinar and 30 MMTPA at Hazira, both in Gujarat. It plans to expand this capacity to 158 MMTPA by 2013. The company has committed Rs.8,200 crore for this purpose, of which Rs.4,600 crore has already been invested.