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Allcargo board approves acquisition of 30% stake in GKEPL from KWE Group

  • India Infoline News Service |
  • 10 Nov, 2022 |
  • 10:22 AM
The board of Allcargo Logistics Limited on Thursday has approved the plan to acquire 30% stake in GKEPL from KWE group. Allcargo Logistics had acquired shareholding in Gati Limited in FY20 and had agreed in principle with KWE to discuss purchase of their shares in the main operating entity, GKEPL, at a future date on mutually agreeable terms.

Over last two years, Allcargo has brought in transformational changes in Gati since its acquisition and in line with the company’s well-planned strategy, it now proposes to further increase its investment in the business.

Allcargo has reached an agreement with KWE to buy their shares in the operating entity in mutually agreed terms. Share Purchase Agreement shall be executed in due course of time.

In context of transaction for logistics parks, Board of Directors took note that, the major condition precedent, which waslong pending has now been fulfilled and the transaction would be consummated with signing of SPA, which is expected in next 3-4 weeks.

Subsequent to this, Optionally Convertible Debentures of Rs112 crore and Lease Rental Discounting of approx Rs183 crore sitting in these concerned SPVs shall get alienated from the Company’s Books.

Further, there would be an actual additional cash inflow of approx. Rs105 crore on closure of the said transaction, thereby reducing the overall debt at Allcargo level by approximately Rs400 crore. This reduction in debt does not factor in the additional impact of optional assets at Haryana Logistics Park.

At around 10:25 AM, Allcargo Logistics Ltd is currently trading at Rs411.20 per share down by Rs5.3 or 1.27% from its previous closing of Rs416.50 per share on the BSE.

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