Here's Why Shares Of Allcargo Logistics Gained and Allcargo Gati Saw Losses
Buying Gati today would mean getting Gati and little of Allcargo, while buying Allcargo would give shareholders all the businesses.
Shares of Allcargo Logistics were trading 8% higher on Friday, while those of Allcargo Gati ended with losses of 13% after company approved for restructuring of businesses under Allcargo Limited and Allcargo Gati Limited (Formerly Gati Limited).
Allcargo's Scheme Of Arrangement
As per the scheme, International Supply Chain (ISC) business will be demerged into a separate entity Allcargo ECU Limited. This would include the India part of International Supply Chain business along with the international subsidiaries held under the ECU Worldwide NV. Shareholders of Allcargo will get one share of demerged Allcargo ECU for every one share held.
The Express and Contract Logistics Business will be held by the remaining entity, Allcargo Logistics. Additionally there will be Amalgamation of Gati with and into Allcargo Logistics Limited where Gati shareholders to get 63 shares of Allcargo for every 10 shares held. This takes into account 3:1 bonus shares approved by shareholders for Allcargo Logistics recently.
"With the merger of Allcargo Supply Chain and Gati Express business, the scheme will create a strong P&L, balance sheet and cash flows to drive synergistic growth & expansion in the fast growing domestic logistics market to create an unmatched powerhouse in the domestic supply chain business", said Shashi Kiran Shetty, Founder and Chairman, Allcargo Group
The scheme is expected to be implemented in the period of 10-12 months. Allcargo Group to eventually have four listed businesses, Allcargo ECU Limited and Allcargo Logistics post demerger of ISC business, alongside Allcargo Terminals Limited and TransIndia Real Estate Limited, which were created through earlier scheme of arrangement
Why Shares Of Allcargo Logistics Gained While Allcargo Gati Saw Losses
If one buys one share of Allcargo Logistics today they will get one share of Allcargo ECU based on swap ratio, a direct holding in Gati as there will be amalgamation of Gati with and into Allcargo Logistics. While buying Gati today will give shareholders 63 shares of Allcargo for every 10 shares held.
Buying Gati today would mean getting Gati and little of Allcargo, while buying Allcargo would give shareholders all the businesses.