CESC restructures business in four companies

CESC restructures business into four companies to unlock value

CESC restructures business into four companies to unlock value

The RP-Sanjiv Goenka group on Thursday announced it was restructuring operations of its flagship company CESC.

"It is a mirror image demerger, meaning shareholders of CESC will get proportionate shares in all four companies", Sanjiv Goenka, Group Chairman, said.

Company takes the restructuring route to unlock value, especially from power distribution business.

According to him, the third entity will house Spencer's and retail while the fourth company - CESC Ventures - will house non-power and retail businesses.

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

Goenka said CESC's share capital today stands at Rs 132 crore.

After the restructuring, CESC shareholders having 10 shares (of ₹10 face value each) will get 18 fully paid shares in the four companies.

Speaking about the debt distribution, Goenka said CESC Ltd's debts are very low.

It has power distribution franchise at Kolkata, Noida, Bikaner, Kota and Bharatpur serving about 35 lakh consumers.

Goenka said resultant share capital for each of the company will be Rs 66 crore for generation and distribution company, Rs 40 crore for Spencer's Retail, and Rs 26 crore for CESC Ventures.

Whatever debt has been taken for distribution will go to distribution company and whatever debt was taken for generation would go to generation company. Spencer's retail is also expected to demerge into a separate listed company.

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.

"Our apparel brand 2Bme has done well with approximate monthly sales of ₹8 crore", Goenka said. The lender had posted a net loss of Rs 1,735 crore in the corresponding quarter past year.

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