Shreyas Shipping and Logistics Ltd to sell stake in businesses for $27.766 mn

The Board of Directors of ("Board") Shreyas Shipping and Logistics Ltd at their meeting held on Tuesday, 18th August 2020, which commenced at 2.30 P.M. and concluded at 4.30 P.M. via videoconferencing, have unanimously approved a transaction with Unifeeder ISC FZCO ("Unifeeder") which entails ('Transaction'): (a) transfer of the Company's containerized domestic coastal and Exim feeder shipping business ("Business Undertaking") to Unifeeder; (b) execution of a long-term framework chartering agreement ("FCA") with the relevant Unifeeder entity for chartering of the Company's vessels; and (c) sale of the entire stake of 29.22% which the Company holds in Avana Logistek Limited ("ALL") to Unifeeder.

As part of the larger transaction, Transworld Holdings Limited, Mauritius ("TWH"), the majority shareholder in ALL, would also sell its holding of 70.78% in ALL to Unifeeder. TWH would be concurrently selling its overseas businesses to Unifeeder and receive a minority stake in Unifeeder.

The Company gets an opportunity to tap into the synergies emerging from the foregoing and thereby extract the best possible terms for such sale of the Business Undertaking as well as the minority stake in ALL.

The Company would sell to Unifeeder its containerized domestic coastal and Exim feeder shipping business for a gross cash consideration of USD 19 million (which will get converted into INR upon remittance to the Company's bank account), subject to adjustments on account of debt, cash and working capital post the closing. Given that the containerized domestic coastal and Exim feeder shipping business is a business undertaking of the Company.

As part of the transaction, the company would purchase 100% of the shares of a company known as Transworld Feeders Private Limited ("TFPL") from 2 individual promoters of the Company, i.e. Mr. S. Ramakrishnan and Mr. Ritesh S. Ramakrishnan at face value, i.e. INR 100,000. The Company would transfer its undertaking of the containerized domestic coastal and Exim feeder shipping business to such wholly-owned subsidiary i.e. TFPL in consideration for issue of shares by TFPL, through a slump exchange. The Company would then ultimately transfer all its shares in TFPL to Unifeeder. The Company would then enter into a long-term FCA with TFPL and enter into chartering agreements pursuant thereto.

The Company would sell to Unifeeder, its 29.22% stake in ALL for a gross cash consideration of USD 8.766 million (which will get converted into INR upon remittance to the Company's bank account), subject to adjustments on account of debt, cash and working capital post the closing. The price per share for the sale of shares in ALL is the same price as the price being paid by Unifeeder to TWH, the owner of the majority stake of 70.78% of ALL.

As part of the above transactions with Unifeeder, the Company shall receive a gross consideration of USD 27.766 million (which will get converted into INR upon remittance to the Company's bank account), subject to adjustments on account of debt, cash and working capital post the closing. The Company will utilise the proceeds from the transaction, towards reducing its debt as well as for acquisition of new vessels.

Shares of SHREYAS SHIPPING & LOGISTICS LTD. was last trading in BSE at Rs.91 as compared to the previous close of Rs. 87.35. The total number of shares traded during the day was 11646 in over 102 trades.

The stock hit an intraday high of Rs. 91.7 and intraday low of 87. The net turnover during the day was Rs. 1046385.

Source : Equity Bulls

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