Allcargo group announces restructuring scheme - CL with Gati, International Supply Chain to become independent businesses
December 05 , 2023
Mumbai, 21st December, 2023: Allcargo Logistics Limited Board and Allcargo Gati Limited board have approved the composite scheme of arrangement for restructuring of businesses under Allcargo Limited and Allcargo Gati Limited (Formerly Gati Limited). 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.
Express business and Contract Logistics business would come under the resulting entity Allcargo Logistics (post ISC demerger) which will benefit from combined synergies and the shareholders of Allcargo and Allcargo Gati will get direct shareholding eliminating inefficient complex corporate structure.
As per the approved swap ratio, based on the recommendations of the independent valuers,shareholders of Allcargo Gati will get 63 shares in the resulting Allcargo Logistics entity (post ISC
demerger) for every 10 shares held in Allcargo Gati. Shareholders of Allcargo will get 1:1 shares in the demerged Allcargo ECU Limited and continue to hold their shares in Allcargo Logistics Limited, which will now be the resulting entity holding Express and Contract Logistics business directly. This takes into account 3:1 bonus shares approved by shareholders for Allcargo Logistics recently.
Commenting on this announcement, Shashi Kiran Shetty, Founder and Chairman, Allcargo Group, said “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."
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