Kolkata-based power generation and distribution company CESC will no longer pursue its plan to separate generation and distribution businesses, it has informed in a stock market filing on Thursday.
In the filing, CESC said that in continuation of its intimation dated 12 October 2018, informing shareholders that the scheme was made effective from 1 October 2017, except demerger of the generation undertaking of the company into Haldia Energy Ltd, a wholly-owned CESC subsidiary.
“The Board of Directors, at its meeting held on Thursday, inter alia, discussed the present status of the demerger and decided that it would be prudent and in the best interest of the company, its shareholders and other stakeholders to no longer pursue the said Demerger. The company will make the necessary application to the Kolkata bench of the National Company Law Tribunal in this regard. We request you to kindly take this on record,” CESC said in its filings to the exchange.
Last year, the company had announced that CESC would be demerged into three entities. Power and retail would be separate companies while IT, FMCG and Quest Mall will be brought under another company. The plan was to demerge distribution and generation of CESC at a later stage. It had applied West Bengal power regulators’ permission for demerging these two companies and signing of a power purchase agreement between the two.
Other power business like Haldia Energy Ltd and Dhariwal Infrastructure, it’s solar, hydel and power distribution businesses in other states continued to remain subsidiaries of CESC.
CESC had already received NCLT’s order for four-way demerger. However, it divided the company into three as it needed state power regulator’s approval for separating its power distribution and generation business.
