The demerger of the profit-making property division, effective April 1, 1999, will also witness family patriarchs K M Sheth and S J Mulji stepping down as MDs but will continue in the company in advisory capacity. The board has proposed that the shares of the new company will be directly allotted to Gesco shareholders and the share entitlement ratio will be considered by the board in its next meeting.

While another family member, Ghanshyam Sheth has been made managing director of the real estate company, Vijay and Bharat will look after offshore and shipping division of Gesco respectively.

With this, G E Shipping will now focus on its core business of shipping and offshore services where it enjoys a commanding position in both fields in India. Therestructuring involves the demerger of the property business activities along with the staff and intangibles into a separate company. The new company will also be listed on the stock exchanges.

The executive vice-president of Gesco, Ravi Sheth said that the demerger will help bringing in international collaborators to invest in the equity capital of the new company. Initial talks have already begun with SEMBCORP of Singapore with whom Gesco has an ongoing relationship.

The new company will exploit new business opportunities will arise to acquire capital assets at lower values due to weakening market conditions. Sheth said that Gesco is looking at the option of share buy-back to enhance shareholders value. ``We will evaluate share buy back at an appropriate time and then make announcement,'' Sheth said. At present promoters, the Sheths hold 12 per cent stake in the company while financial institutions hold 15 per cent and other shareholders sharing the rest of the equity.