On August 12, the board of directors of India-based Essar Shipping Ports & Logistics Ltd (ESPLL) unanimously passed a resolution to divide its shipping, logistics and oilfield businesses into separate entities.
This process will create two separate entities proposed to be named Essar Ports Ltd. (ESPLL) and Essar Shipping Ltd. The new company, Essar Shipping Ltd will also be listed on the NSE and BSE. The scheme also includes the merger of two wholly owned investment subsidiaries into ESPLL by September 30 for simplification of the holding structure.
The arrangement is subject to such approvals as may be required including that of stock exchanges, lenders, shareholders and High Court.
Essar Ports, which is the second largest private sector ports company in India with an existing capacity of 76 million per year, is to be expanded to a capacity of 158 million mt per year by 2013. The company has committed $1.8 billion towards the project, of which Rupees 1 billion has already been invested.
On the other hand, the shipping business has a diversified fleet of 25 vessels and has placed orders for 12 new ships expected to join the fleet over the next 24 months.