The Board of Allcargo Logistics Ltd has hired Inga Ventures Pvt Ltd to carry out due diligence ahead of taking a call on a proposal moved by the promoter and promoter groups to delist the company’s shares from the bourses.

At a meeting called to discuss the delisting proposal on Thursday, the board noted that it has to be approved by the Board and the shareholders of the company in accordance with the SEBI Delisting Regulations.

“The delisting proposal is required to be approved by the Board only after receipt of a due diligence report from a merchant banker appointed by the Board in this regard,” the company said after the meeting.

The promoter and promoter groups said that the planned delisting would enhance the company’s operational, financial and strategic flexibility including corporate restructurings, acquisitions, exploring new financing structures including financial support from the members of the promoter group.

Focus on reducing debt

The propose delisting will align the Group’s capital and operational structures, streamline the process of servicing the Group’s financing obligations and significantly improve a range of important credit metrics.

“As a result, the transaction is expected to support an accelerated debt reduction program in the medium term and, in turn, support the Group’s highly attractive longer term growth pipeline,” the promoters told in an August 24 letter to the company.

The long-term business plan involves expanding operations into new geographies and new business activities which may have different risk profiles, longer gestation periods compared to the current risk profile of the company, the promoters said.

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