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TCIL to demerge real estate, warehousing divisions

30 Aug 2010 Evaluate

Transport Corporation of India (TCIL) will demerge its real estate and warehousing divisions in next three months and expects to create greater value for shareholders through the hive-off. After the demerger, the company would focus on the core activity of providing logistic services.

The company has 15 real estate properties with a book value of Rs 55 crore. It has engaged consultants to ascertain the best use and market value of the properties. As per the demerger scheme, a holder of 20 shares of Rs 2 each in TCIL will receive one share of Rs 10 in the new company. The earning per share (EPS) of the company was Rs 5.9 at the end of March 2010 against Rs 3.9 a year ago. TCIL aims to take it to Rs 8 by the end of 2011-12.

Company is also exploring the possibilities of setting up multimodal logistics parks along the dedicated freight corridor being developed by Dedicated Freight Corridor Corporation of India (DFCCIL). DFCCIL has planned four such zones in Haryana and Gujarat in public-private partnership mode. DFCCIL will provide only land for the zones while the development investment will have to be put in by partner companies.

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