Allcargo Hikes Stake In GATI To 20.8%
An empty cart sits in a warehouse. (Photographer: Victor J. Blue/Bloomberg)

Allcargo Hikes Stake In GATI To 20.8%


Allcargo Logistics Ltd., the largest player in the private sector logistics space, has acquired an additional 7.5 percent stake in GATI Ltd., becoming the single largest shareholder in the express logistics company with 20.8 percent stake.

It can be noted that late last November the Shashi Kiran Shetty-led company had announced plans to buy 44.5 percent in GATI for Rs 416 crore in a three-way deal.

The latest stake purchase comes even as Allcargo is awaiting approval from the Securities and Exchange Board of India to begin an open offer for picking up an additional 26 percent in the Hyderabad-based company.

The latest share purchase is done through a preferential allotment in line with the GATI's shareholders nod at the extraordinary general meeting on Jan. 7, as well as open market purchases aggregating to an additional 91 lakh shares.

While GATI promoter sold 5.16 percent stake to Allcargo pursuant to the share purchase agreement, another 2.31 percent was bought from the open market on Tuesday, Allcargo said in a statement.

The company did not disclose the price at which the shares were bought on Tuesday. While GATI shares closed 0.73 percent up at Rs 69.40 on the BSE, the Allcargo counter closed 1.1 percent down at Rs 117.05.

It can be noted that Allcargo had acquired close to 13 percent stake on Jan. 21 and 8.5 percent early December.

"Allcargo is on course to complete the transaction to acquire 44.5 percent stake in GATI. We are abiding by the regulatory and compliance norms while carrying out this transaction," Shetty, chairman of Allcargo, was quoted as saying in the statement.

He further said on completion of the deal, Allcargo will gain a leadership position in the domestic express logistics segment and develop capabilities to offer end-to-end services to its customers.

The recent share purchase from the promoters marks the end of the second phase of a three-way deal that Allcargo intends to complete in due course.

It can be noted that on Jan. 8, more than 87 percent of GATI shareholders had voted for the sale of the company to Allcargo despite a concerted bid by the estranged family of GATI promoters to scuttle the deal.

GATI founder Mahendra Agarwal's wife Neera and sons Dhruv and Manish had in December approached regulator SEBI to stall the open offer from Allcargo, citing various court cases against Agarwal and a Hyderabad court order to attach his 1.6 million shares.

Earlier this month, global private equity major Blackstone had agreed to pump Rs 380 crore into an Allcargo arm engaged in warehousing through a combination of equity and debentures worth up to Rs 380 crore, Allcargo had said on Jan. 13.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.