The Competition Commission of India (CCI) has given a green signal to the proposed re-arrangement between Varun Shipping Company Ltd, Tarun Shipping Company Ltd and Varun Gas Infrastructure into its other wholly-owned subsidiaries.
The proposed scheme will enable the Yudhishthir D. Khatau Group (YDK Group) to rearrange and realign the businesses by segregating them into shipping business, ship management and shipping investment.
It will also allow the group companies to pursue individual growth strategies.
The competition watchdog has allowed the combination involving ship management and shipping investment businesses of Varun Shipping Company Ltd to merge into Varun Global Pvt Ltd. It said that the proposed combination was not likely to give rise to any adverse competition in India.
The CCI also allowed the demerger of offshore shipping and shipping investment business of Tarun Shipping and Industries from Varun Maritime Pvt Ltd
The promoters of Varun Corporation Ltd, TSIL and Real Point (Mauritius) hold 5.54 per cent, 10.02 per cent and 22.23 per cent share, respectively, in Varun Shipping Company Ltd. The remaining equity is held by public, financial institutions and others. Real Point is a wholly-owned subsidiary of Varun Corporation Ltd. VCL is owned 99 per cent by Y.D. Khatau Group.
The board of Varun Shipping has approved this scheme.
Mr Khatau is the president of Baltic and International Maritime Council (BIMCO), a body of shipping companies. According to Bimco, the first five months of 2012 have been developing in the right direction for the container shipping industry.
Freight rates on the main routes have been going up since the past four months, though the amount has been decreasing. The total hikes amount to $1,100-1,300 per twenty feet equivalent unit container.