Delta Corp Stock Trades 5% Higher As Gaming Firm Approves Demerger

The stocks of Delta Corp surged around 5 per cent in the Wednesday trading session after the Board of Directors at its meeting held on 24 September approved the demerger of its hospitality and real estate business.

Delta Corp stock traded with 4.8 per cent gain at Rs 135 in the morning session on the National Stock Exchange (NSE). However, the stock still trades with a year-to-date (YTD) loss of more than 7 per cent.

Delta Corp is engaged in the business of gaming, hospitality and real Estate. The company has evolved into diversified segments like casino gaming, online gaming, hospitality and real estate.

Delta Penland is a newly incorporated company and will carry on the hospitality and real estate business. Delta Penland is a wholly owned subsidiary of the company and in the process of converting from a private limited company to a public company and necessary approvals in this regard are awaited.

As far as The Deltin, Daman, it is proposed to execute a contract between the resulting company and the company for its management and the property would continue to be owned by the Company.

As per the share entitlement ratio determined the resulting company will issue and allot to eligible shareholders 1 new equity share of face value of Rs 1 each, credited as fully paid-up, for every 1 equity share of face value of Rs 1 each fully paid-up held by such shareholders in the Company.

The simplified corporate structure will make it easier for the management of the company to focus on its core business. Currently, the company does not get desired value for its hospitality and real estate business as it is mainly seen as a company engaged in gaming business.

The demerger scheme will enable both the entities to tap respective sectoral growth strategies which will eventually attract specific investors. Further the risk across various sectors will be leveraged.