ESSAR SHIPPING PORTS AND LOGISTICS LTD. Vs. STATE

JUDGEMENT

(1.) THE petitioner is the transferee company and has filed the present petition before this Court to obtain the sanction of this Court to a scheme of amalgamation to be made between India Shipping and Essar Sisco Shipping Management Co. Ltd. ('transferor companies') and Essar Shipping and Ports Logistics Ltd. ('the petitioner') or the transferee company.

(2.) THE petitioner -company was originally incorporated on April 5, 1975, under the provisions of the Companies Act, 1956, as Karnataka Shipping Corporation Ltd., with Registrar of Companies, Karnataka. The name of the said company was changed to Essar Shipping Ltd., on September 5, 1994. Later on March 24, 2008, the name of the said company was changed to its present name, i.e., Essar Shipping and Ports Logistics Ltd. The registered office of the company has been shifted from the State of Karnataka to the State of Gujarat vide fresh certificate of registration dated August 21, 2008. The registered office of the petitioner is situated at Administrative Building, Essar Refinery Complex, Okha Highway (SH -25), Khambalia taluka, Jamnagar in the State of Gujarat.

(3.) BOTH the transferor companies and transferee company are all part of the same group (the Essar group) and are engaged in the business of shipping and other allied activities. In view of the common business prospects, the management of the group has considered it appropriate to merge the transferor company into the petitioner -company. It is the case of the petitioner that the consolidation will ensure creation of larger entity and derive optimal management synergy and benefits. The proposed scheme will result in business synergies besides economies in cost by combining all the function, related activities and operations resulting in higher profitability and benefits in the form of financial resources, managerial and technical expertise. The proposed scheme enables cost savings, pooling of managerial skills and optimum utilisation of valuable resources. It will also enhance the management focus thereby leading to higher profitability and enhancing shareholders value. Such a rationalisation of the structure of the Essar group is in the interest of the shareholders, creditors and employees of each of the transferor companies and the transferee company.