Indian Transport & Logistics

Allcargo restructures operations, to have 4 listed entities

Allcargo Logistics and Allcargo Gati shareholders to get shares in operating entities eliminating complex structure

Allcargo restructures operations, to have 4 listed entities

Shashi Kiran Shetty, Founder and Chairman, Allcargo Group

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The boards of Allcargo Logistics and Allcargo Gati approved a composite scheme of arrangement for restructuring of businesses.

"As per the scheme, the international supply chain (ISC) business will be demerged into a separate entity: Allcargo ECU. This would include the India part of the ISC business along with the international subsidiaries held under the ECU Worldwide," says an official release.

Express business and contract logistics business would come under the resulting entity Allcargo Logistics, and the shareholders of Allcargo and Allcargo Gati would get direct shareholding eliminating inefficient complex corporate structure, the release added.

Shareholders of Allcargo Gati will get 63 shares in Allcargo Logistics for every 10 shares held, and shareholders of Allcargo will get 1:1 shares in the demerged Allcargo ECU and continue to hold their shares in Allcargo Logistics. "This takes into account 3:1 bonus shares approved by shareholders for Allcargo Logistics recently."

Shashi Kiran Shetty, Founder and Chairman, Allcargo Group says: “This is a momentous occasion in the history of the Allcargo Group. Our intention is to empower our flagship businesses with strategic independence and operational synergies with customer integration in express and contract logistics businesses and direct shareholding in operating companies. This will also establish financial accountability for the management team, comprising best in class senior & middle management team to drive the businesses forward with growth and return mindset with a digital first approach. 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.

“A simple structure and sharp business focus under an independent management team/board of directors will enable the Allcargo Group to continue to drive its track record of growth, having demonstrated near 18 percent CAGR over the last 20 years.”

The scheme is expected to be implemented in 10-12 months, subject to regulatory approvals, the release added.

Allcargo Goup will eventually have four listed business undertakings - Allcargo ECU, Allcargo Logistics, Allcargo Terminals and TransIndia Real Estate.

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