Sterlite Power Transmission Ltd (SPTL) has received the green light from its shareholders and creditors to demerge its transmission business into a separate entity, paving the way for independent growth strategies.
New Delhi: Sterlite Power Transmission Ltd (SPTL) has obtained the necessary approvals from its shareholders and creditors to proceed with the demerger of its transmission business. This strategic move, initially announced in November of the previous year, will see the transmission business separated into a distinct entity, while SPTL will retain its manufacturing operations.
The demerger proposal garnered significant support from stakeholders, with 100% approval from secured creditors, 99.26% approval from unsecured creditors, 99.99% from equity shareholders present and voting, and 100% from non-fund-based lenders, according to a company statement.
According to SPTL, the demerger will empower both the transmission infrastructure business (to be housed under Sterlite Grid 5 Limited) and the global products & specialized EPC services business (remaining under SPTL) to pursue independent growth strategies with greater agility and focus.
The company believes that the new structure will enable each entity to attract capital pools tailored to its specific requirements. Sterlite Grid 5 is anticipated to appeal to long-term investors seeking stable cash flows, while SPTL is expected to attract capital-seeking investors interested in higher returns typically associated with pre-IPO or capital market investments.
Pratik Agarwal, Managing Director of SPTL, emphasized that the support from stakeholders validates the strategic rationale behind the demerger. He stated that it represents a significant milestone in the company's journey to establish two future-ready businesses with distinct growth trajectories.
Following the demerger, SPTL may explore a public listing as part of its fundraising plans.
The demerger will be implemented through a National Company Law Tribunal (NCLT) scheme. Upon completion, all SPTL shareholders will hold identical shareholdings in both companies.
Sterlite Power currently manages a portfolio of 33 completed, sold, and under-construction power transmission projects spanning approximately 16,529 circuit kilometers of transmission lines across India and Brazil. In India, the company has approximately $2 billion worth of projects under management.
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