NCLT Indore Directs Meetings In HEG Demerger, Bhilwara Energy Merger; Some Meetings Dispensed

The order was passed by the bench of Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta

HEG Ltd is a leading company in the manufacturing of graphite electrodes. HEG's shares are listed on the BSE and NSE. HEG Graphite Ltd, being newly incorporated, had minimal assets and liabilities, while Bhilwara Energy Ltd, incorporated in 2006, operated power generation facilities.

The scheme sets out a demerger under which the demerged undertaking of HEG Ltd. will move to HEG Graphite Ltd., the resulting company. In return, HEG Graphite Ltd will issue equity shares to the shareholders of HEG Ltd.

It also includes the merger of Bhilwara Energy Ltd, the transferor company, into HEG Ltd. Under this part of the arrangement, shareholders of Bhilwara Energy Ltd are to receive equity shares in HEG Ltd.

In their submissions, the companies said the separation of businesses would make it easier to track the performance of each segment and improve operational efficiency. They also pointed to the potential for unlocking value for shareholders of the Demerged Company and attracting investors with differing risk appetites, given the distinct nature of the businesses involved.

It was further submitted that, after the amalgamation, HEG Ltd would consolidate the assets and liabilities of Bhilwara Energy Ltd. According to the applicants, this would simplify the group structure and support the creation of an independent brand identity.

The boards of all three companies had already cleared the proposal, passing resolutions on March 10, 2025.

On the question of meetings, the tribunal recorded that consent affidavits had been obtained from the equity shareholders of HEG Graphite Ltd and the unsecured creditors of Bhilwara Energy Ltd.

In light of these consents, their meetings were dispensed with.

It was further recorded that none of the applicant companies have preference shareholders. HEG Graphite Ltd and Bhilwara Energy Ltd do not have secured creditors, and HEG Graphite Ltd also has no unsecured creditors. Given this position, the tribunal held that meetings of these classes were not required.

What remain are the meetings of stakeholders in HEG Ltd., namely its equity shareholders, secured creditors, and unsecured creditors, as well as the equity shareholders of Bhilwara Energy Ltd. These are to be convened within 60 days of receipt of the order through video conferencing or other audio-visual means. Voting is to be conducted electronically, with remote e-voting facilities to be provided.

For Applicants: Advocate Ravi Pahwa and Mehul Shah