Gati plans to sell up to 49% in shipping biz
Logistics player Gati is planning to sell between 26% and 49% stake in its shipping business to a global shipping company to raise funds and expand the business, Managing Director Mahendra Agarwal told Reuters on Tuesday.
March 08, 2011 / 23:06 IST
Logistics player Gati is planning to sell between 26% and 49% stake in its shipping business to a global shipping company to raise funds and expand the business, Managing Director Mahendra Agarwal told Reuters on Tuesday.
"Talks are very positive. I am sure in the next couple of months' time, we should be able to announce the conclusion of our discussions," Agarwal said in an e-mail."We are not talking about totally exiting from this business," he said, clarifying media reports that the company could exit the business altogether."Most of the partners we are talking to are very interested that we be there because of our domain knowledge in this business for this part of the world."Agarwal said it was difficult at the moment to indicate how much the firm would be able to raise as that would "depend on the appetite of our strategic partner".Gati's shipping business currently makes up nearly 10% of its total revenue of USD 221.21 million.Shipping companies in India are witnessing a turnaround in demand after facing rough weather for two years till 2010. In FY10, net profit of Shipping Corp, the largest Indian shipping services firm, fell 60%.Port traffic in the country is expected to triple by 2020 to 2,495 million tonnes. Investments worth Rs 2.7 trillion are expected during the decade to boost ports capacity, according to estimates released by India's shipping ministry."There is a great amount of opportunity on the coastal line of the country. Gati has been present for the last 15-20 years with six ships on the coastal line," Agarwal said."Now, to have the next phase of the growth, we are talking to a couple of shipping partners to get them as a strategic partner in Gati."The company had told Reuters last week it has plans to double its fleet and also boost cold storage operations.On Tuesday, Gati shares had closed down 0.26% at Rs 57.90 in a firm Mumbai market. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
