GE Shipping calls off demerger of its offshore unit

Mumbai, Aug 03 (UNI) Great Eastern Shipping Company (GE Shipping) has declared that the scheme of demerger of the offshore services business into a separate company Great Offshore will not be possible.

Announcing this, the Company said the justification given by the board, which reviewed the status of various approvals from contracting counter parties to material contracts pursuant to the sanction of the Scheme of Arrangement by Bombay High Court, is that the conditions for arriving at the effective date of the scheme were not fulfilled within the stipulated time of six months from the date of the Court order approving the scheme.

''So the demerger automatically lapsed in terms of Clause 35 of the scheme,'' it said.

The board after due deliberations unanimously concluded the above decision at its meeting on August 02, 2006. In the long term interest of the shareholders, the board will examine new possibilities, in due course, for restructuring its business in a manner which will achieve maximization of value accretion to the shareholders, and if necessary, approach them.

Commenting on the development, Mr KM Sheth, Executive Chairman said,''On behalf of the Board of Directors, I put on record the immense support and concurrence received from all contracting counter parties both in the Government as well as in the Private sector, especially ONGC which has been of immense value to us and highly supportive to the business restructuring. I personally thank the shareholders, creditors and the lenders for their support during the whole demerger process''.

On September 15, 2005, the board of the company had approved a scheme of arrangement for demerger of the offshore service business into a separate company, Great Offshore, with effect from April 1, 2005 subject to the approval of High Court of Bombay and other necessary approvals.

Upon the scheme of amalgamation, every 5 shares of the company were to be effectively split into 1 share of Great Offshore, and 4 shares of the company. Also, the paid-up share capital of the company was to be reduced to Rs 152 crore from Rs 190 crore.

Meanwhile, GE Shipping has reported a decline of 21.92 per cent in net profits to Rs 275.93 crore for the quarter ended June 2006 from Rs 353.38 crore in the corresponding quarter last year. During the quarter, the offshore revenue of the company stood as Rs 115.87 crore compared with Rs 71.63 crore in the corresponding quarter last year. Sales declined 4.08 per cent to Rs 552.88 crore compared with the corresponding quarter, a year ago.

During the quarter under review, the company undertook the delivery of a newly built platform supply vessel of DWT 3321 MT named Malaviya Twenty Nine. It also sold MR product carrier named Jag Prach(year built: 1996) of DWT 44124 MT.

The company also contracted for sale an Aframax crude oil carrier named Jag Leena (Year built: 1985) of DWT 95007 MT for delivery in quarter ended September 30, 2006 and contracted to construct two Long Range One (LR1) product tankers of DWT 74500 MT each for delivery in third quarter of financial year 2008-09.

Further, in order to modernise its fleet, Great Eastern Shipping Company (GE Shipping) recently ordered two new building Long Range One (LR1) product tankers from STX Shipbuilding Company, Korea.

UNI SN PM AW1847