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CESC to spilt into four Cos, stock tumbles 15%

Press Trust of India  |  Kolkata 

R P Sanjiv Goenka Group today announced restructuring of its flagship company Ltd by splitting it into four entities but investors reacted negatively and tanked 15 per cent in the bourses.

Group chairman Sanjiv Goenka said is being spilt into four companies by way of the demerger scheme of existing businesses for value unlocking and focused management into each of the verticals, subject to regulatory approvals.


He said all the power distribution businesses of the group will now be under Ltd, generation activity under Generation, retail business Spencer's will be a seperate company and all non-power and non-retail ventures will be brought under an entity, the name of which is yet to be firmed up.

BPO, sports, FMCG and real estate will be bought under under the yet to be named entity. It will become the holding company for Firstsource Solutions, which is already listed.

All the four entities will be listed and the effective date will be October 1.

Goenka said, "The paid up capital of Ltd is Rs 132 crore but has been increased to Rs 198 crore by way of gift, but cannot be termed as bonus. Shareholders will get additional value worth Rs 66 crore when they get fresh of the four demerged entities."

Shareholders holding 10 of Ltd will get five of Rs 10 each in generation and distribution, two in other ventures entity and six in Spencer's (face value of Rs 5 each).

According to Goenka, in the demerged entities paid up capital in Ltd (distribution) will be Rs 66 crore, Generation will be Rs 66 crore, Spencer's will have Rs 40 crore and the entity for all other ventures will be Rs 26 crore.

However, reacted negatively to the announcement as tanked 15 per cent to close at Rs 829.80 at BSE.

Ltd which will manage distribution business of the group has five distribution licenses serving 3.5 million customers. has one distribution licence in Kolkata and Howrah, three in Rajasthan and one in Greater Noida.

Goenka said the group will focus more in distribution business than generation.

Generation will be managing total generation of 2550 MW including thermal and renewables.

Goneka said Spencer's will expand aggresively in Uttar Pradesh, West Bengal and Andra Pradesh by adding two lakh-three lakh square feet every year for the next few years.

Currently Spencer's manages 12 lakh square feet of retail space.

Goenka said in the FMCG space it has acquired a company but declined to spell out details. The group forayed into FMCG recently with snacks.

Meanwhile, Q4 ending March 17' saw the net profit go up marginally to Rs 295 crore from Rs 293 crore registered during the corresponding period last year.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, May 18 2017. 18:07 IST
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