Hyderabad, India-based Gulf Oil Corp. Ltd. shareholders on January 30 gave a voted to approve managements proposal to demerge the companys lubricant business. In a court-ordered vote, shareholders cleared the three-fourths majority required for the plan to move forward.
The Chairman of the Shareholders Meeting appointed by the High Court conducted the meeting of all participants and proxy holders. Shareholders present at the Meeting holding 99.99% in person or through proxy voted for the resolution. Thereby approving the demerger of the Lubricants business of the Company, Gulf Oil Corporation Limited (GOCL) into a separate company (wholly owned subsidiary of the Company) namely Gulf Oil Lubricants India Limited (GOLIL). The GOLIL after receipt of the order of the AP High Court and other regulatory approvals will be listed as a separate entity.
The demerger of the lubricants business from the Company was planned in a way that on demerger, the lubricants business would have reached a turnover of around Rs.1000 crores (US$160 million) and will have several business initiatives and a large expansion project in hand to grow the business further.
On the other hand, the consolidated GOCL residual businesses from explosives, accessories and mining products would be approximately Rs. 400 crores. In addition, property income from Bangalore land development would be yielding revenues and cash inflows from Q3 of 2014 - 15.
The company said that with this demerger, both sides of the business would be in growth phases, with GOCL concentrating more on property development / realty, the acceleration in business on the GOCL side would change the business scenario for the company at a fast pace.
The results of the 2 ballots will be submitted to the AP High Court by the Chairmen of the Shareholders and Unsecured Creditors respectively for their orders in the matter. The appointed date for the demerger is April 1, 2014.
In a separate announcement, Gulf Oil said it plans to build a new lubricant blending plan near Chennai in Tamil Nadu, where a suitable site is being identified.
