GE Shipping demerger extended

MUMBAI: Great Eastern Shipping Company (GE Shipping), the country’s largest private shipping firm, has received 3 months extension for completing its demerger process from the Bombay High Court on Thursday. The new deadline mandated by the court is November 2, ’06.

The court has approved modifications in the demerger scheme — to demerge offshore division into a separate company called Great Offshore (GOL) — by deleting clauses 24 and 32 relating to inter-se transfer of shares among its promoters. On Thursday, GE Shipping’s stock price slipped 1.04% to Rs 270.55 on the Bombay Stock Exchange.

GE Shipping, in its latest statement, said after the demerger both the entities — GE Shipping and GOL — would be headed by KM Sheth as chairman and would have identical promoters. Said a company official: “The 3 months’ extension will be added to the 6 months’ time allowed by the court from February 3, ’06. Thus, the new deadline will be November 2.” He added that the shareholders’ approval was not necessary for the process.

After the demerger, every five shares of the company will be split into one share of Great Offshore and four shares of GE Shipping. Following the demerger scheme, the paid-up share capital of the company will reduce to Rs 152.27 crore from Rs 190.34 crore.

The demerger was delayed due to reservations expressed by its major client, Oil and Natural Gas Corporation (ONGC). Later, GE Shipping had decided to put on hold the demerger plan after missing the August 2 deadline as mandated by the court. The company revived a plan to spin off its offshore service division on August 9, saying it would apply to the court to extend the deadline.”