The Hindu Business Line : Great Offshore turns weak

Great Offshore Ltd has lost 4 per cent in the past one week as it closed on Thursday at Rs 795.70 with a total volume of 6.5 lakh shares on the BSE and the NSE.

Interestingly, all other offshore services counters — Aban Loyd, Garware Offshore, South East Asia Marine and Selan Exploration — are currently ruling strong on growth prospects.

Analysts attribute Abans' surge to the Sinvest deal, while Garware's price rise is seen in the light of new contracts and deliveries apart from expansion plans. Market sources indicate that an ABN Amro report dated December 27, 2006, which did not paint a very bright picture, could have influenced the sentiment for Great Offshore.

Interestingly there is talk in the market that Mr Vijay Sheth, Managing Director of Great Offshore, has indirectly acquired 1.5 lakh shares in his company in four trading days in the last one week. The acquisition is reported to have been made through market purchases by four unlisted entities - finance or investment companies - in which he personally holds substantial stake.

The latest acquisitions, representing around 0.50 per cent equity in GOL, used the creeping acquisition route at an approximate cost of Rs 13 crore, according to market sources involved in the mop-up exercise.

The current acquisition, if correct, would consolidate Mr Sheth's holding to 3.71 per cent following listing of GOL.

Incidentally, Mr Vijay Sheth's cousin, Mr Bharat Sheth, Deputy Chairman and MD of Great Eastern Shipping, and his family together with persons acting in concert have acquired close to 44 lakh shares in GE Shipping at a reported cost of Rs 100 crore during the period between September 1 and December 31, 2006, to take control of over 7.59 per cent in the company.

But both the cousins have disclosed only the direct portion of their holdings in the respective companies they control now. As per existing SEBI regulations — Substantial Acquisition of Shares & Takeovers Regulations 1997 and Prohibition of Insider Trading Regulations 1992 — indirect holding or control by any director of a listed company need not be disclosed to the stock exchanges.

After de-merger of the offshore oil field services business of Great Eastern Shipping through a scheme of arrangement and creation of GOL, which was listed on the exchanges on December 21, Mr Vijay Sheth personally controlled a 3.21 per cent stake (2.01 per cent directly - as disclosed under Regulation 13 (6) of SEBI - and the balance 1.11 per cent in the name of his family members, associates and body corporates in which he has substantial controlling interests).

The stock was listed at Rs 702 and reached a high of Rs 906 in three trading days.

As per the scheme, every five shares in Great Eastern Shipping as on record date (November 15, 2006) was issued four shares of Great Eastern Shipping and one share of GOL.