NCLT Allows Demerger of Emami’s Power and Cement Business

In the petition filed with NCLT, Emami pegged that the demerger will bring strength to each business with a focused and individual attention.

National Company Law Tribunal’s Kolkata bench has recently approved the demerger of Emami’s solar power business, Emami Power, from its cement business, Emami Cement Limited.

A petition was filed by the Indian conglomerate Emami Group seeking approval of the NCLT for the demerger of its businesses to achieve operational efficiency.

Emami Group had entered the renewable energy sector with a target of achieving more than 300 MW of installed solar power capacity. Currently, with projects in Karnataka, Gujarat, Tamil Nadu, and Uttarakhand, Emami Power has a total installed capacity of 47 MW of solar projects.

In the petition filed with NCLT, Emami pegged that the demerger will bring strength to each business with a focused and individual attention to each. The move will also help the companies achieve economies of scale and managerial efficiency therefore faster decision making.

The tribunal has allowed the transfer of all properties, rights, licenses, permissions and interest of the solar power division of Emami Cement, and to be vested in Emami Power including 10 MW solar power plant located in Santalpur, Patan, Gujarat and a 3 MW solar power plant located at Perunali, Kamuthi.

All liabilities and duties of the solar power division of Emami Cement will also be transferred to Emami Power.

Emami Power is now expected to issue and allot equity shares to the shareholders of Emami Cement.