GE Shipping plans buyback

GE Shipping plans buyback
ENS ECONOMIC BUREAU

MUMBAI, OCT 20: Alarmed over a hostile takeover raid on its group company Gesco Corporation, the Sheths of Great Eastern Shipping have launched a buy back for its flag ship company. As per a notice sent to the Bombay Stock Exchange (BSE), GE Shipping board will consider the buy back in its next board meeting.

The Sheths hold a very low equity of 13 per cent in the company while the rest is owned by the financial institutions, GDR holders and small shareholders. ``As the Sheths were `surprised' at the takeover attempt on its real estate company... it seems they do not want any more surprises on Great Eastern Shipping,'' says a market analyst. GES scrip closed at Rs 32.60 on Friday as compared to yesterday's close of Rs 30 on the BSE.

The buyback offer will be made as per Sebi norms specified this year, analysts say adding that by not offering shares during the buy back, the Sheths will increase their own shareholding in the company.

Meanwhile, the company was still chalking out a strategy for the takeover battle initiated by the Delhi-based Renaissance Estates Ltd (REL), a wholly owned subsidiary of Utkal Investments Ltd (UIL), for GESCO Corporation Ltd. The Delhi firm has offered a price of Rs 23 per share payable in cash which has been already breached in the stock markets. The present promoters, the Sheths of Great Eastern Shipping have only 15 per cent stake in the company and have vowed to salvage the company from any hostile bids. s

GESCO is also listed on the Bombay Stock Exchange. The offer, which would open on November 24 and close on December 23, 2000, is subject to necessary approval from the Reserve Bank of India for acquisition of shares from NRI shareholders.

REL, which has similar operations as GESCO, and Calcutta-based non banking finance company, UIL are controlled by the A H Dalmia group that has been managing large cement and granite operations.