Allcargo Gati, Allcargo Logistics shares jumped up to 8% today. Here's why

Shares of Allcargo Gati Ltd (Formerly Gati Limited) and Allcargo Logistics Ltd were trading up to 8 per cent higher in Friday’s trade after the boards of two companies approved the composite scheme of arrangement for restructuring of businesses under Allcargo Limited and Allcargo Gati.

As per the scheme, the 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, Allcargo Gati said in a BSE filing.

"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," Allcargo Gati said.

Shares of Allcargo Logistics were trading 8.27 per cent higher at Rs 308.45 on BSE. Allcargo Gati, on the other, were trading 7.27 per cent higher at Rs 148.25. Allcargo Logistics own 50.2 per cent stake in Allcargo Gati.

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," Allcargo Gati told stock exchanges.

Founder and Chairman, Allcargo Group Shashi Kiran Shetty said: “ 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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