Gulf Oil Corporation, a Hinduja Group company, plans to take up its expansion project that entails setting up of a lubricants manufacturing plant near Chennai.

The Hyderabad-based company, has completed the demerger process of the lubricants business.

Subhas Pramanik, Managing Director, told Business Line , “The demerger process will be beneficial to the company shareholders. It has been concluded at a court convened meeting of shareholders and unsecured creditors.”

The demerged lubricants business, Gulf Oil Lubricants India, would have a turnover of about ₹1,000 crore and has plans for several business initiatives and a large expansion project to grow the business further.

This expansion project will take about 18 months and involves setting up of a new plant near Chennai in Tamil Nadu, where a suitable site is being identified, he said.

Following the demerger process, the lubricants business will be listed separately after securing all approvals.

The parent Gulf Oil Corp will principally concentrate on real estate projects and property development in its projects located in Bangalore and Hyderabad.

The consolidated residual Gulf Oil business from explosives, accessories and mining products would be approximately ₹400 crore.

The property division is expected to yield revenues and cash flows in 2014-15.

Following the demerger process, the existing share capital of the company of ₹19.83 crore will be split equally between Gulf Oil and Gulf Oil Lubricants India at ₹9.915 crore each.

At the end of the demerger process and after securing all clearances, the existing shareholders will receive one share of Gulf Oil (face value of ₹2 each) and one share of Gulf Oil Lubricants (face value of ₹2 each) in place of two shares (face value of ₹2) held in Gulf Oil.

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