Dubai’s Transworld Holdings will delist Indian subsidiary Shreyas Shipping & Logistics (SSL) as part of a bid to take full control.
The shipping group said the coastal feeder ship operator will leave the Bombay Stock Exchange and the Northern Stock Exchange if it succeeds with a share offer to other investors.
The price will be determined through a reverse book-building mechanism. Transworld needs 90% of Shreyas to carry out the privatisation. It has 70.44% today.
Based on a market cap of INR 6.85bn, a buy-out would cost INR 2bn ($24m) to reach 100%.
The stock has jumped 20% to INR 312 per share since the announcement.
VesselsValue assesses the fleet of 11 boxships, two handysize bulkers and a multipurpose cargo vessel as worth nearly $143m.
Transworld said it “believes that delisting of SSL would enable the members of the group to obtain full ownership of SSL, which in turn will provide enhanced operational flexibility”.
“As SSL will no longer remain listed in India, there will be [a] reduction in dedicated management time to comply with the requirements associated with [the] continued listing of equity shares, which can be refocused on its business,” the company added.
Transworld will also save money on annual listing fees and cash payable to share transfer agents.
The delisting will enhance SSL’s “operational, financial and strategic flexibility, including but not limited to corporate restructurings, acquisitions, exploring new financing structures, including financial support from the group,” the parent said.
Three vessels added
In April, Shreyas snapped up three container vessels for Indian coastal trades from Lomar Shipping, CK Line and TS Lines following ship price collapses in the sector.
Transworld chairman Sivaswamy Ramakrishnan said the group is continuing efforts to simplify its structure.
“This proposed transaction is fully aligned with the robust strategy pursued over the years. It will transform the group’s credit profile while offering a fair exit price to minority shareholders,” he added.
“Provided it can be completed at a price that balances the needs of all stakeholders, it has the potential to fundamentally reposition our business for the future,” Ramakrishnan said.
Transworld last year made a move into tankers with a double purchase of LR1 ships.
The latest diversification involved two 74,000-dwt clean carriers renamed TTC Vidyut and TTC Shakti.
