Essar Shipping to demerge; ports split from shipping, oilfields
10 May 2011
Essar Shipping, Ports & Logistics will be split into two separate companies, Essar Ports Ltd and Essar Shipping Ltd. Stockholders of the unified company will get two shares of Essar Ports and one of Essar Shipping for every three shares they hold, it added.
It also announced in a release from Mumbai that a new management structure for the two companies once they are listed, which it said is likely to happen by the end of June.
As a result of the announcement, shares of Essar Shipping soared to a new high, rising as much as 10 per cent on the Bombay Stock Exchange to hit the upper trading limit early on Tuesday.
Essar Shipping, Ports & Logistics, which has a share capital of Rs615 crore, will start trading as Essar Ports with a reduced capital of Rs410 crore. The remaining Rs205 crore will form the share capital of Essar Shipping, which will list subsequently.
Essar Shipping said the de-merger process was completed after it received approvals from the relevant authorities. The company fixed 19 May as the record date for the share swap.
After the de-merger, Essar Shipping Ports will be known as Essar Ports, while the shipping, logistics and oilfields businesses will be spun off into Essar Shipping. The company is expected to get listed separately at the end of June.