Delta Corp shares surge 10% on demerger news; key details

Shares of Delta Corp Ltd soared nearly 10 per cent in Wednesday's trade after the diversified company board announced plans to demerge its hospitality and real estate business in a bid to make it easier for the management to focus on its core business gaming. The scheme is subject to approval of the shareholders, stock exchanges, SEBI and NCLT, which should take between 10 and 12 months, Delta Corp informed stock exchanges.

Delta Corp said the move will unlock value as it does not get desired value for its hospitality and real estate business, as it is mainly seen as a company engaged in the gaming business. The scheme will create value for shareholders of the company as they will be issued 1 equity share of the resulting company, which will become listed pursuant to the scheme, for every 1 share held in the company, Delta Corp said.

Following the development, the stock jumped 9.74 per cent to hit a high of Rs 141.85 on BSE. The stock is up 19 per cent in the past six months, yet it is down 7.60 per cent in 2024 so far.

Once the scheme is effective, there will be two separate listed entities. The resulting company will focus exclusively on the hospitality and real estate vertical and Delta Corp would continue to be in the gaming business.

At present, Delta Corp is engaged in the business of gaming including live, electronic, and online. It is also into hospitality and real estate business.The hospitality and real estate business includes Deltin Suites, a 106-room, all-suite hotel with a casino located in Goa; The Deltin, a 176-room five-star deluxe property and the largest integrated resort spread over 10 acres located in Daman; Marvel Resorts, a proposed 440 room hotel spread over 8,000 square metres in Goa currently under advanced stage of construction; and land situated in Dhargalim, Goa, where it is proposed to develop an integrated resort with a water park spread over 88 acres.

Delta Corp also holds investments in hospitality and real estate companies.

"Delta Penland Private Limited (“DPPL” or “Resulting Company”) is a newly incorporated company and shall carry on the hospitality and real estate business. DPPL is a wholly owned subsidiary of the Company. DPPL is in the process of converting from a private limited company to a public company and necessary approvals in this regard are awaited," Delta Corp said.

Upon the scheme becoming effective, all shareholders of the company are and will be the ultimate beneficial owners of the resulting company in the same ratio (inter se) as they hold shares in the company, Delta Corp said.

"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," it said.