GE Shipping said the board will meet on June 26 to consider a preferential issue of convertible warrants to the promoters and directors of the company. |
This is the first time that India's largest private sector shipping company is making a preferential allotment to its promoters. |
K M Sheth, the promoter of Great Eastern Shipping Company (GE Shipping), will sell 18 per cent stake in Great Offshore (GOL) for Rs 450 crore to Vijay Sheth and buy 3 per cent stake of GE Shipping from the latter. |
The K M Sheth faction, consisting of K M Sheth, Bharat Sheth, Ravi Sheth and Jyotsana Sheth, will sell their 18 per cent stake in Great Offshore (GOL), an offshore shipping service company demerged from GE Shipping, and would buy out 3 per cent stake owned by GOL promoter Vijay Sheth in GE Shipping. |
As a result of this transaction, the promoters of GE Shipping are expected to get around Rs 450 crore, which would be parked in the preferential allotment, sources close to the development said. |
According to the Sebi guidelines, the promoters can up their stake up to 5 per cent through preferential allotment. |
Sachin Kasera of investment research firm, Pinc Research said, "This transaction will be cash-positive for the K M Sheth faction. The decision to invest the money in GE Shipping shows their confidence in the company." |
Analysts have pointed out that shareholders will benefit from the move as they have already enjoyed 28 per cent return on their investment since the date of demerger. |
The GE Shipping scrip today closed 1.71 per cent up on the BSE at Rs 347.90, against the previous day's close of Rs 342.05. |