Delta Corp’s shares experienced a significant boost of 8 percent on September 25, following the announcement of a strategic demerger involving its Hospitality and Real Estate businesses.
This move aims to create a new entity, Delta Penland Private Limited (DPPL), which is expected to unlock value and drive growth in both sectors.
The gaming and hospitality firm, Delta Corp, operates across several segments, including Casino Gaming, Online Gaming, Hospitality, and Real Estate.
The board's approval of this demerger indicates a clear intent to enhance operational efficiency and focus on each sector’s unique growth opportunities.
Under the demerger plan, DPPL will become a wholly owned subsidiary of Delta Corp.
The new entity will manage the hospitality and real estate divisions. Currently, Delta Corp is transitioning from a private limited company to a public one, pending necessary regulatory approvals.
The demerger will be executed through a Composite Scheme of Arrangement as outlined in Sections 230-232 and Section 66 of the Companies Act, 2013.
Delta Corp has informed stakeholders that the process will require approvals from shareholders, stock exchanges, the Securities and Exchange Board of India (SEBI), the National Company Law Tribunal (NCLT), and other regulatory bodies, which may take around 10 to 12 months.
Once the scheme is effective, shareholders of Delta Corp will receive one share of DPPL for each share they hold in Delta Corp.
This structure ensures that all current shareholders will benefit from the new entity in proportion to their existing holdings.
Furthermore, shares of DPPL will be listed on stock exchanges, providing investors with the opportunity to engage with both Delta Corp and its new subsidiary.
The company has assured stakeholders that the demerger will not adversely affect employees, customers, or business partners.
As of 9:16 am on the announcement day, Delta Corp’s stock was trading over 7 percent higher at Rs 139.65 on the NSE.
Despite this surge, the stock has seen an overall decline of 8 percent for the year, underperforming compared to the Nifty’s gains of 19 percent.
In the past 12 months, Delta Corp's stock has dipped by 2 percent, while the Nifty index has surged by 31 percent during the same timeframe.