The board of Allcargo Logistics approved the demerger of CFS/ICD business into Allcargo Terminals and demerger of equipment rental, logistics parks and other real estate assets into TransIndia Realty & Logistics Parks (TransIndia).
As per the company's press statement, the demerger will position the company to accelerate growth across businesses by creating independent business undertakings, with "sharper management focus, better access to right capital, and greater operational and financial flexibility."
The resulting company Allcargo Terminals will be a major player in the CFS business in India and will continue to expand its footprint in ICDs. Five out of seven facilities of Allcargo Logistics are already on lease and the new resulting structure will make all seven CFS/ICDs completely asset light, positioning the company strongly to drive growth with high return on capital employed.
Under the proposed scheme of demerger, the equipment rental and real estate businesses will move to TransIndia. This will create a portfolio of class grade A warehouses and other assets leased to marquee clients. The business will also hold the shares in the JV with Blackstone. Post demerger, the business would have opportunity to attract pools of capital, as grade A warehousing is in very strong demand and capabilities of TransIndia will provide opportunities for robust growth.
Under the scheme of demerger, all three companies will have mirror shareholding, resulting in no change in entitlement of shareholders for each entity. Post demerger, shareholders will get 1 share each of Allcargo Terminals and TransIndia Realty & Logistics Parks for every 1 share held of Allcargo Logistics. The 1:1 ratio will avoid fractional allotment and benefit all shareholders, the exchange filing highlighted.
Allcargo Logistics' consolidated net profit surged 355.9% to Rs 264.39 crore on 113% increase in net sales to Rs 4,977.86 crore in Q2 September 2021 over Q2 September 2020.
Shares of Allcargo Logistics advanced 3.30% to close at Rs 373.85 on Thursday, 23 December 2021. Allcargo Logistics is India's largest integrated logistics solutions provider.
Powered by Capital Market - Live News
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU