Delta Corp. approved the demerger and listing of the hospitality and real estate businesses on Tuesday. The businesses will come under wholly-owned subsidiary Delta Penland Pvt., which was recently incorporated and is in the process of converting from a private limited company to a public company, according to an exchange filing.
Shareholders will get one share of Delta Penland for every share held in Delta Corp. Public shareholders own 66.74% and promoters the rest 33.26% in the parent company as of Sept. 24.
The hospitality and real estate business includes hotels and casinos located in Goa and Daman.
The scheme is subject to approval of the shareholders, stock exchanges, Securities and Exchange Board of India, National Company Law Tribunal and other regulatory bodies. The completion is expected to take between 10 and 12 months.
The turnover of the demerged division as of March 31, 2024 was Rs 4.58 crore and contributed 0.72% to the total turnover of Delta Corp.
Unlock Value, De-Risking
Segregating the gaming business from the hospitality and real estate verticals will result in the creation of two separate, robustly listed entities, Delta Corp. said.
The proposed reorganisation will unlock value, provide better flexibility in accessing capital, attract business-specific partners and investors, allow a focused management approach for pursuing revenue growth and expansion opportunities in the respective business verticals and de-risk the businesses for the demerged entity, the company said.
"A clean corporate structure with no cross-holdings will ensure transparency, accountability, and the and the highest standards of corporate governance and compliance. It also enhances operational flexibility and helps quick response to competitive or environmental challenges," a statement said.
The online gaming company faced major shocks last year after receiving GST demands of over Rs 20,000 crore. It is also reeling under a 28% GST rate imposed on online gaming.
Shares of Delta Corp. closed 1.6% lower at Rs 129.25 apiece, ahead of the announcement, compared to a flat BSE Sensex.
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