Greatship considering IPO to raise funds for asset acquisition
23 March 2010
Great Eastern Shipping Company's wholly-owned unlisted subsidiary, Greatship is considering an initial public offering to raise funds for acquisition of assets for offshore services.
In its communication to the stock exchanges yesterday, Great Eastern Shipping board approved that Greatship considering an IPO and said that any proposed offering and its timing would be subject to market conditions, statutory clearances and approvals from shareholders.
According to Ravi K Sheth, managing director of Greatship, it is the first step in the direction of listing the subsidiary and the rest would finalised in due course. He did not divulge the amount the company would raise through the IPO.
According to market sources, the company may file the draft red hearing prospectus with the regulator Securities and Exchanges Board of India (Sebi) within a month.
Great Eastern started building its offshore business starting with Great Offshore but the company underwent a de-merger in 2005 to meet a family settlement which saw management of Great Offshore go to Vijay K Sheth, cousin of Ravi K Sheth.
Great Eastern then built its offshore business under Greatship but due to pledging of shares Vijay Sheth lost control over Great Offshore which is now under control of Bharti Shipyard.
According to analysts shipping being a cyclical business, developing a subsidiary of an offshore business provides a balance for these companies.
They say an IPO would help in bringing about a speedy expansion of the subsidiary at a time when offshore business was likely to pick up.
GE stock was down 2.18 per cent to Rs282.9 on Monday. The company announcement had some after the close of trading hours.