Delta Corp Stock Jumps 8% Following Hospitality and Real Est

Synopsis: Delta Corp's stock jumped 8% after announcing the demerger of its Hospitality and Real Estate businesses into a new entity, Delta Penland Private Limited (DPPL). The restructuring aims to unlock growth potential in both sectors, with shareholders benefiting through one DPPL share for each Delta Corp share. The demerger will take about 10-12 months, pending approvals.

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Shares of Delta Corp Rise on Restructuring News

September 25: The shares of Delta Corp soared over 8% following the company's decision to split its hospitality and real estate businesses into one the new outfit being called Delta Penland Private Limited, or DPPL-the two sectors demerged by the company's board of directors.

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Hospitality and Real Estate Spin-Off into DPPL

Delta Corp with the experience of casino gaming, and online gaming as well as in hospitality, would seek to spin its hospitality and real estate businesses off into a more focused DPPL. After demerger, Delta Corp would then be left with a fully owned subsidiary, which would continue handling hospitality and real estate businesses. The Company would seek change its DPPL from a private limited company into a public limited company subject to regulatory approvals.

Shareholder Benefits and Listing Plans

Shareholders of the Company during the reorganization will be given one DPPL share for every Delta Corp share owned by them. This ensures proportionate benefits of the new entity to the shareholders. DPPL shares also get listed on stock exchanges so that investors can invest in both Delta Corp as well as DPPL.

Also read: India's OYO buys USA's G6 Hospitality for $525M in an all-cash transaction

Approval Process and Timeline

It will be a Composite Scheme of Arrangement under the Companies Act, 2013 (Sections 230-232 with Section 66). The company thinks that it should get the approvals from the shareholders, SEBI, stock exchanges, NCLT, and other regulatory bodies within 10-12 months. Delta Corp clarified that this change will not impact its employees, customers, or business partners.

Share Price and Market Response

Delta Corp's shares traded at Rs 139.65 on the NSE after 7% gain at 9:16 am on the announcement day. The stock has continued its under-performance this year also as it has slipped 8% while Nifty is up 19%. In the last 12 months, Delta Corp slipped by 2% as the Nifty index gained a whopping 31% in the period.

With inputs from agencies
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