A provincial court in India has approved Gulf Oil Corp.s decision to carve its lubricants operations into a separate business.
The blessing from Andhara Pradesh High Court was the last hurdle to Gulf Oil Corp.s demerger plan, first announced in August. Gulf Oil Corp. officials say they will now schedule a stock swap in which shareholders will receive one share each of Gulf Oil Corp. and the new company, Gulf Oil Lubricant India Ltd., for every two existing shares of Gulf Oil Corp. Gulf Oil Lubricants India Ltd. will be listed on Indias National Stock Exchange and the Bombay Stock Exchange after all legal formalities are complete.
Company officials have contended that the lubricants business deserved a dedicated management team to support its rapid growth. Despite arguments against the demerger by outside experts and proxy advisors, a majority of shareholders supported the proposal in a Jan. 30 vote ordered by the Andhra Pradesh court.
The Hyderabad, India-based and Hinduja-owned Gulf Oil Corp. conglomerate will focus on its other business segments – which include mining services, explosives supply and property development, while the growing lubricants division continues to expand geographically.
Gulf Lubricants International markets Gulf fuels and lubricants outside of India and has been expanding geographically. It now operates in 120 countries and is aiming for more growth in Africa and Central Asia.
The company also plans to build a blending plant in or near Chennai, India and augment its existing plant in Silvassa, India.