CESC To Restructure Business, Profit Remains Flat
The RP-Sanjiv Goenka Group will merge all its arms with parent CESC.
CESC Ltd. posted its highest intraday loss in more than 6 months on confusion around share allotment after the power producer said it will merge some of its subsidiaries with itself, and demerge certain others to form four independently listed companies.
The parent CESC Ltd. will continue to house the power distribution business, while all the power plants will be housed under Haldia Energy Ltd. Spencers Retail will be listed separately. Other retail, business process outsourcing (Firstsource) and entertainment ventures, including New Rising Promoters Private Ltd. – the owner of Rising Pune Supergiant and Athletico De Kolkata teams – will be brought under CESC Ventures Ltd.
CESC is being split into four companies by way of ‘mirror image’ demerger for value unlocking and focused management into each of the verticals.Sanjiv Goenka, Chairman, RP Sanjiv Goenka Group
All these four entities will be listed and the effective date will be October 1, the company said.
Shareholders will get additional value worth Rs 66 crore when they get fresh shares of the four demerged entities. For each 10 shares of CESC Ltd., a shareholder will get five shares of Rs 10 each in generation, distribution, two shares in CESC Ventures and six shares in Spencer’s (face value of Rs 5 each).CESC Press Release
CESC’s net profit remained flat at Rs 295 crore in the January-March quarter compared to the year-ago period, marginally higher than the consensus estimate of analysts tracked by Bloomberg. Total income grew 6.7 percent to Rs 1,572 crore, it said in a separate filing.
The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) fell by nearly half to Rs 263 crore. EBITDA margins contracted to 16.7 percent from 34.2 percent over a year ago.
With inputs from PTI.