Delta Corp’s shares jumped over 8% on September 25 after the company announced a major restructuring initiative. The board of directors approved the demerger of its Hospitality and Real Estate businesses into a newly formed entity, Delta Penland Private Limited (DPPL).
Strategic Restructuring for Growth
Delta Corp, which operates in Casino Gaming, Online Gaming, Hospitality, and Real Estate, sees the move as a strategic step to unlock value and create growth opportunities for both sectors. The demerger is expected to enhance focus on these segments, driving better operational efficiency.
Formation of Delta Penland Private Limited
Post-demerger, DPPL will be a wholly owned subsidiary of Delta Corp, handling the hospitality and real estate operations. Delta Corp is currently in the process of converting DPPL from a private limited entity to a public company, pending necessary approvals.
Demerger Process and Timelines
The demerger will take place through a Composite Scheme of Arrangement under Sections 230-232, along with Section 66 of the Companies Act, 2013. This scheme is subject to approvals from shareholders, stock exchanges, SEBI, NCLT, and other regulatory authorities, with the process expected to take 10-12 months.
Shareholder Impact
Once the scheme is in effect, Delta Corp shareholders will receive one DPPL share for every Delta Corp share they hold. This ensures that all Delta Corp shareholders will benefit equally from the new entity. Additionally, DPPL shares will be listed on stock exchanges, giving shareholders the opportunity to invest in both Delta Corp and DPPL.
No Impact on Business Operations
Delta Corp assured that the demerger will not affect employees, customers, or business partners. “The shares of the Resulting Company shall be listed on the stock exchanges pursuant to the Scheme. The Scheme will have no impact on employees, customers, and our business partners,” the company said.
Stock Performance in Last One Year
Delta Corp shares have delivered mixed returns across various time frames. Over the past month, the stock has shown a notable 6.61% return, reflecting its stability and growth potential. In the last six months, the stock rose by 14.32%.
However, year-to-date, Delta Corp shares have declined by 5.84%, highlighting negative momentum in the current fiscal year. Over the last twelve months, the stock has posted a negative return of more than 4%, showing a broader downtrend.
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