The diversified RP-Sanjiv Goenka Group plans to split flagship company CESC Ltd into four listed firms that will focus on power generation, distribution, retail and information technology sectors.
As part of the restructuring, the company will merge units CESC Infrastructure Ltd, food retailing firm Spencer’s Retail Ltd and Music World Retail Ltd into itself.
The company will then be divided into CESC Ltd, Haldia Energy Ltd, RP-SG Retail Ltd and RP-SG Business Process Services Ltd, it said in a stock-exchange filing on Thursday.
“Given its diversified business, it has become imperative for the company to reorient and reorganise itself in a manner that allows imparting greater focus on each of its businesses,” it said.
Shares of CESC recovered a tad on Friday, after plunging as much as 15% on Thursday.
After the restructuring, CESC will hold the power distribution business. Haldia Energy will be the holding company for the power generation and the renewable energy business.
In 2016-17, the power generation business reported revenue of Rs 2,034.23 crore, which is 28% of the total turnover of CESC.
RP-SG Retail will hold the retail business of Spencer’s Retail, excluding its operations in Gujarat. The businesses to be merged into RP-SG Retail had total revenue of Rs 2,000 crore in 2016/17.
RP-SG Business Process will house the information technology business of the company. It will also include the company's investment in Spen Liq Pvt Ltd, a wholly owned arm. Spen Liq has a stake of about 55% in listed BPO firm Firstsource Solutions Ltd.
Consumer goods firm Guiltfree Industries Ltd and snack maker Apricot Foods Pvt. Ltd, which markets its products under eVita brand, will become part of RP-SG Business Process.
CESC said its shareholding pattern will remain the same after the restructuring. The shareholding pattern of the new companies will mirror that of CESC.
The total income from operations of CESC Ltd stood at Rs 14,202 crore in 2016/17.