The de-merger of the lubricants division of Gulf Oil Corporation Ltd (GOCL) to Gulf Oil Lubricants India Ltd, a wholly-owned subsidiary will be effective from April 1, 2014, after securing shareholders nod and other regulatory clearances.
After the de-merger, other than the Lubricants business, the residual company GOCL would continue to hold the other three divisions — explosives, mining products and services and realty/ infrastructure.
The value of shareholdings of all the GOCL shareholders would remain unaffected by this Scheme of Arrangement mainly because they would have equal shareholding in both the entities (GOCL and GOLIL) as per the scheme. That is for every existing two shares (face value Rs 2) held in GOCL they would receive 1 share of each of the two companies of the same face value ₹2 each.
The board decided to demerge the business of lubricants and greases as it would get market valuations applicable to Lubricant companies thereby, enhancing shareholder value. GOCL plans to focus on its property development business in Bangalore and Hyderabad.
Since the main objective of this Scheme of Arrangement is to give specific focus to the lubes business in India it was also announced that the subsidiaries of GOCL in Bangladesh, Indonesia and China would be disinvested for an overall amount of ₹54.9 crore (cost of investment ₹29.1 crore ). This transaction has already been completed and the company has received ₹54.9 crore.
The court convened meetings of shareholders and creditors are scheduled for January 30.