Allcargo to buy biz from promoters, raise Rs 300cr

The board of directors of Allcargo Global Logistics, which met today, approved a proposal for the acquisition of the business, including the assets and liabilities, of the projects and equipment division of Transindia Freight Services (TFSPL).

According to a release issued by Allcargo to the BSE today, TFSPL is an unlisted company owned by the promoter-family of the company, "and is primarily engaged in the business of contracting transportation of containers and project-related cargo, and hiring of cranes, reach stackers and forklift trucks. TFSPL is also engaged in investments and car hire."

The board approved a share swap ratio of 518 fully paid-up equity shares of the company for every 100 fully paid-up shares of TFSPL based on a joint recommendation of two leading firms of chartered accountants, Khimji Kunverji & Co. and Walker, Chandiok & Co.

Accordingly, the shareholders of TFSPL will be issued 21,03,080 fully paid-up equity shares of Rs 10 each of the company as consideration for the proposal.

Based on the weighted average price of Allcargo shares of Rs 982 on the BSE in noon deals today, the valuation of TFSPL would be around Rs 206 crore.

The promoters, who already hold 79.6% stake in the company (holding over 1.61 crore shares out of the total issued shares of 2.02 crore shares), would see their holding in the company move up to nearly 90% after the proposed swap.

The board of Allcargo also approved a proposal to raise up to Rs 300 crore through issue of equity shares and/or equity-linked instruments/ securities.

The company has appointed Citigroup, Collins Stewart Inga and the investment banking arm of Kotak Mahindra Capital Company as the merchant bankers for the purpose.