Allcargo board approves demerger of CFS/ICD, warehousing operations

December 28, 2021: The board of Allcargo Logistics has approved the demerger of its container freight station (CFS) and inland container depot (ICD) business into Allcargo Terminals.

The board has also approved the demerger of the equipment rental, logistics parks and other real estate assets into TransIndia Realty & Logistics Parks (TransIndia).

"Allcargo Terminals will be the market leader in CFS business in India and continue to expand its footprint in ICDs. Five out of seven facilities of Allcargo are already on lease and the new resulting structure will make all seven CFS/ICDs completely asset-light, positioning the company strongly to drive growth with high return on capital employed," an official statement said.

TransIndia will have  the best grade A warehouses and other assets leased to marquee clients, the statement added. "The business will also hold shares in the joint venture with Blackstone. Post demerger, the business would have an opportunity to attract right pools of capital as grade A warehousing is in very strong demand and capabilities of TransIndia will provide opportunities for robust growth."

Shashi Kiran Shetty, chairman, Allcargo Logistics, ECU Worldwide and Gati said: "The scheme will facilitate strategic growth in demerged businesses and make the company stronger.”

After the demerger, shareholders will get one share each of Allcargo Terminals and TransIndia Realty & Logistics Parks for every one share held of Allcargo Logistics.