Chambal to demerge shipping arm, infuse Rs 338-cr

Chambal Fertilisers and Chemicals today said it intended to demerge India Steamship, to provide the wholly-owned shipping subsidiary more functional freedom.

It will also infuse Rs 338 crore fresh capital to India Steamship, one of the oldest shipping companies operating with a fleet of six Aframax tankers.

"...Such restructuring will provide scope for independent collabortaion and expansion of the shipping buisness without impacting the other businesses carried on by the company," the fertiliser maker said in a filing to Bombay Stock Exchange.

Shareholders of the Kolkata-based India Steamship would get one shares in Chambal Fertilisers and Chemicals for every eight shares they held in the firm, the filing said.

Chambal Fertilisers' Restructuring Committee, which put forward its recommendations to the Board today, suggests that the proposed merger would help accruing shareholders' value and allow India Steamship to carry out a focused strategy for conducting business.

Following the Restructuring Committee's suggestions, the Chambal Board decided to a fresh capital infusion of Rs 338 crore in India Steamship through subscription of equity.

The merger, however, is subject to various clearances.