The restructuring is aimed at enhancing shareholder value and the shares of the new company will be directly allotted to Gesco shareholders, according to a press release issued here on Tuesday.

With effect from April 1, 1999, the management of the day-to-day affairs of the company will be entrusted to Vijay K Sheth (executive director, offshore division) and Bharat K Sheth (executive director, shipping division) and they will be designated managing directors.

Chairman and managing director, KM Sheth, and SJ Mulji, presently deputy chiarman and joint managing director, will relinquish from the post of managing directors but remain as executive chairman and executive deputy chairman respectively, said the release.

Until the time thedemerger becomes effective, Ghanshyam S Sheth, presently executive director of the property division, will also be designated managing director to continue to look after this division.

Once the demerger becomes effective, it is proposed that be become the managing director of the new demerged property company.

The recast also draws upon the positive changes to the Income Tax Act proposed for the business reorganisation by the Finance Bill, the release said.

The demerger will also result in roping in an international collaborator to invest in the equity capital of the new company. Initial discussions have also begun with prospective overseas partners.

Properties and contracts other than those being demerged would remain in Gesco as they are being developed for purely outright sale, said the release. The restructuring would enable Gesco to concentrate on its core business, shipping and offshore services where it enjoys a larger market share, it added.