INDIA BUSINESS WORLD - March 1st - March 15th - 2008
GTC BOARD OKAYS DEMERGER OF REALTY BUSINESS
Cigarette manufacturer GTC Industries' board of directors has granted in-principle approval to demerge the tobacco and the real estate businesses into two separate entities. The demerged entities would be listed separately on the stock exchanges in India.
Commenting on the development, GTC Industries chairman Sanjay Dalmia said: "The demerger would unlock shareholder value across both verticals, tobacco as well as real estate. The company is in the process of examining various options for working out a suitable scheme of demerger keeping the interest of the shareholders in mind."
As reported earlier, GTC Industries has been looking to demerge its real estate assets spread across Mumbai, Baroda and Hyderabad into a separate company. The demerged entity would then become a real estate development company while GTC would remain the cigarette manufacturer with brands like Panama and Chancellor. The demerged company would form joint ventures and develop real estate assets.
The real estate assets include 7.5 acre at Ville Parle in Mumbai where the company has a factory. It is expected that this plant would be either shut down or relocated to some other production unit of the company. The Ville Parle land is expected to be used for construction of a mall.
GTC also has 2.75-acre in Hyderabad which is being developed into a mall and a fourscreen multiplex. The company may also look at developing a part of the Baroda facility, which is located close to the airport.
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