In a major recast of operations and corporate structure, Adani group on Friday announced demerger of all ports and power assets into two already listed firms, while transmission business would be spun out into a new company to be listed separately.
The restructuring, which involves moving away from the holding company structure for the group, would entail existing shareholders of the current flagship firm Adani Enterprises getting direct fresh shares of the ports and power companies.
Besides, the transmission assets would be demerged into Adani Transmissions Limited, which would become a wholly owned subsidiary of Adani Enterprises (AEL) and would be listed separately as "one of the largest private sector transmission companies".
Without disclosing the financial details, the group said that the scheme of arrangement will simplify corporate structure providing shareholders of AEL direct shareholding in the respective operating companies and unlock value for investors by "eliminating holding company discount".
The announcement followed its board of directors unanimously approving demerger of its diversified businesses. The port business of the company will be demerged and vested in AdaniPorts and Special Economic Zone Ltd (APSEZ). The power utility will be merged into Adani Power Ltd.
Further, Adani Mining Private Limited (AMPL), a wholly owned subsidiary of AEL, is proposed to be merged into AEL. The demerger will be effective from April 1, 2015 subject to regulatory approvals.
"The scheme of arrangement will simplify corporate structure providing the shareholders of AEL direct shareholding in the respective operating companies, listing of one of the largest private sector transmission companies with over 5,000 circuit kms of transmission lines across Western, Northern and Central regions of India and increase free float at APL and APSEZ."
"Transaction is expected to unlock value for the shareholders of AEL by eliminating holding company discount," the statement said.
The Adani Group is one of India’s leading business houses with revenue of over $9.4 billion.
Pursuant to the demerger of the port undertaking of AEL into APSEZ, APSEZ will issue and allot new equity shares to shareholders of AEL "in the ratio of 14,123 shares in APSEZ for every 10,000 equity shares held".
APL will allot new equity shares to shareholders of AEL in the ratio of 18,596 shares in APL for every 10,000 equity shares held in AEL.
"Pursuant to the demerger of the transmission undertaking of AEL into ATL, ATL to issue and allot new equity shares to equity shareholders of AEL in the ratio of 1 equity share in ATL for every 1 equity share held by the equity shareholder," the statement said.