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GE Shipping announces Demerger details
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News Body:
Great Eastern Shipping Company Ltd (GE Shipping) has
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| announced that the Board of Directors of the Company at its
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| meeting held on September 15, 2005 has approved the details of the
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| Scheme for demerger of the Offshore services business into a
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| separate company.
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| The scheme of demerger approved by the Board envisages the
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| demerger of the Offshore business consisting of drilling services,
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| marine logistics, marine construction and port/terminal services,
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| into a separate new company, Great Offshore Ltd with effect from
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| April 01, 2005 through a High Court approved process.
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| In consideration of the demerger, shareholders of the Company will
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| be issued, at no cost, 1 fully paid share of Rs 10 each in Great
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| Offshore Ltd for every 5 shares of the Company held, consequent to
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| which and simultaneously, the shares held in the Company will stand
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| re-organised to 4 shares of Rs 10 each for every 5 shares currently
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| held. The demerger share entitlement ratio approved by the Board
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| is on the basis of the recommendations of two leading firms of
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| Chartered Accountants and independent valuers, namely, Deloitte
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| Haskins & Sells and Kalyaniwalla & Mistry. Since all shareholders
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| will be issued shares in Great Offshore Ltd on a proportionate
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| basis, there will be no change in the overall shareholding pattern on
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| the date demerger becomes effective. Post the demerger, shares of
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| Great Offshore Ltd will be listed on the exchanges where the
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| Company is currently listed (i.e. The Stock Exchange, Mumbai
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| ("BSE") and the National Stock Exchange ("NSE").
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| Upon the demerger becoming effective, the paid-up share capital of
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| Great Offshore Ltd will be Rs 380.70 million, and that of the
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| Company will be Rs 1522.70 million, against the existing Rs 1903.40
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| million. The networth of Great Offshore Ltd as on April 01, 2005
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| would stand at Rs 4461.20 million and that of the Company will
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| stand re-organised at Rs 17,410 million, against the existing Rs
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| 21,871.20 million.
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| The demerger, will be in compliance with the provisions of section 2
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| (19AA) of the Income Tax Act, and is considered the most efficient,
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| tax neutral and shareholder friendly mechanism to restructure the
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| businesses.
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| In order to achieve the objectives of the restructuring most
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| effectively, Mr. Vijay K Sheth who has been managing the Offshore
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| Business will be the Managing Director of Great Offshore Ltd. Mr.
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| Bharat K Sheth, who has been managing the Shipping Business, will
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| continue to manage this business in the Company as Dy. Chairman
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| & Managing Director.
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| The above restructuring will be subject to relevant approvals and
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| confirmation of the demerger scheme by the High Court of Mumbai.
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