NCLT Mumbai Orders Stakeholder Meetings On Delta Corp Plan To Separate Gaming And Hospitality Businesses

The Mumbai Bench of the National Company Law Tribunal (NCLT) has directed Delta Corp Limited to convene meetings of its shareholders and unsecured creditors to consider a proposed restructuring scheme that would separate its hospitality and real estate businesses from its gaming operations.

A bench of Judicial Member Ashish Kalia and Technical Member Sanjiv Dutt passed the order on a first-motion application filed by Delta Corp Limited and three related companies seeking directions on the proposed arrangement.

The tribunal directed that meetings of Delta Corp's equity shareholders and unsecured creditors be held within 60 days through video conferencing or other audio-visual means to consider the scheme.

The order records the companies' submission that it was "desirable and expedient to reorganize and reconstruct DCL by segregating its gaming business from hospitality and real estate vertical."

Under the proposed scheme, Delta Corp's hospitality and real estate business in Goa would be transferred to Deltin Hotel & Resorts Private Limited. Its hospitality and real estate business outside Goa would be transferred to Delta Penland Limited. At the same time, Deltin Cruises and Entertainment Private Limited, a step-down wholly owned subsidiary of Delta Corp engaged in gaming-related activities, would be amalgamated with the listed company.

The appointed date for the scheme is April 1, 2025.

Delta Corp is currently engaged in both gaming and hospitality and real estate businesses. According to the companies, the restructuring is intended to create separate platforms for the two business verticals. Delta Corp would continue as the gaming-focused listed entity, while Delta Penland Limited is proposed to focus on the hospitality and real estate business.

The tribunal noted the companies' submission that the proposal would result in "the creation of two separate robust listed entities".

The companies also informed the tribunal that the restructuring would help unlock value for shareholders, provide greater flexibility in raising capital, and allow a more focused management approach for the different businesses.

Referring to the benefits claimed under the scheme, the tribunal recorded that the reorganisation was expected to result in "unlocking of value and create enhanced value for shareholders and allow a focused strategy in operations".

Under the share entitlement mechanism proposed in the scheme, shareholders of Delta Corp would receive one fully paid-up equity share of Delta Penland Limited with a face value of ₹1 for every one fully paid-up equity share of Delta Corp held by them.

The tribunal dispensed with meetings of shareholders and creditors of the other applicant companies after noting that they had filed consent affidavits approving the proposal.

It also directed notices to be issued to the Securities and Exchange Board of India, the National Stock Exchange, BSE, the Regional Director, the Registrar of Companies, income tax authorities, GST authorities, and other sectoral regulators before the matter proceeds further.