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As part of de-risking and restructuring the business, Hinduja's promoted Gulf Oil Corporation, has decided to de-merge the lubricants business into a separate listed entity.
"Based on the recommendations of the committee, the board has in principle approved the demerger of the lubricants business into a separate listed company. The detailed scheme will be approved in the next board meeting," the company said in a press statement.
The board, has recommended a dividend of Rs 2.20 per share at 110% for 2012-13 subject to the approval of shareholders at the annual general meeting.
The company posted a lower net profit of Rs 17.28 crore for the fourth-quarter ended March 31, 2013, against Rs 20.93 crore for the corresponding quarter last year. Income for the fourth-quarter was Rs 265.30 crore as against Rs 249.18 crore.
For the financial year ended March 31, 2013, the company posted net profit of Rs 47.53 crore against Rs 50.10 crore previous year and an income of Rs 1,264.79 crore against Rs 1,236.47 crore previous year on a consolidated basis.
"The overall demand for lubricants was subdued due to the lower goods movement, flat / negative growth of the automobile, infrastructure, mining and industrial sectors," the company's press statement added.
The company, through its subsidiary HGCL Holdings Ltd, UK, had acquired Houghton International Inc in the US. HGHL has taken a loan of $360 million from a bank to part finance the acquisition.
During the 2011-12 financial year, out of the gross revenue of Rs 1,007 crore, the lubricants division's share was 85%, with explosives (9%) and contracts (6%) contributing the balance. The lubricants division generated sales of Rs 931 crore, a 37 jump over the previous fiscal (2010-11).
The company's shares were trading at Rs 66.85, up by Rs 2.61, at the Bombay Stock Exchange (BSE).
