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GE Shipping to start new company

GE Shipping announced that its Board has approved a proposal to spin off its offshore oilfield services business into a separate company.

business Updated: Aug 31, 2005 15:52 IST
Reuters
Reuters
PTI

Great Eastern Shipping Co Ltd, India's largest private sector shipping firm, said on Wednesday its Board had approved a proposal to spin off its offshore oilfield services business into a separate company. The move will help both businesses to grow faster, it said.

The shipping division contributed 82 per cent of the company's revenue of Rs 20.5 billion in the year ended March 2005, while the offshore division accounted for 17 per cent.

The offshore oilfield services division offers services to oil and gas exploration and production companies, including drilling services, marine and air logistics, port and terminal services.

"Given the current growth momentum in the offshore oil services industry, the new company will be able to harness the potential of this business," KM Sheth, Eecutive Chairman of GE Shipping, said in the statement.

The company said the shareholding of the new company would mirror the shareholding in GE Shipping.

The de-merger is effective from April 1, 2005 after courts approve the scheme. Kotak Investment Banking is working out the details of the de-merger plan. The new company will also be listed.

The shipping division supplies dry bulk carriers and tankers to clients. Oil majors such as Royal Dutch Shell, BP, Exxon Mobil and Chevron Texaco have used its tankers.

GE Shipping's shares were up 3.17 per cent at Rs 196.75 at the BSE in the afternoon while the market was up 0.6 per cent.

First Published: Aug 31, 2005 15:32 IST