Sterlite Power Transmission Ltd (STPL) has received approval from its equity shareholders, secured creditors, unsecured creditors, and non-fund-based lenders for the demerger of its transmission business.
In a release, STPL said that the vote on the demerger proposal received 100 per cent approval from secured creditors, 99.26 per cent approval from unsecured creditors, 99.99 per cent from equity shareholders present and voting, and 100 per cent by non-fund-based lenders.
The proposed demerger will empower both its businesses – the demerged transmission infrastructure business to be housed under Sterlite Grid 5 Ltd and the Global Products & Specialised EPC services business that will continue to remain under Sterlite Power Transmission Ltd.
The simplified structure will allow each entity to attract capital pool tailored to its requirements, the release said, adding that the infrastructure business can target long-term, patient investors seeking predictable cash flow, while SPTL, focusing on the Global Products & Services (GPS) business, can attract capital seeking higher returns typically suited for pre-IPO or capital market investors.
The demerger will be implemented through a National Company Law Tribunal (NCLT) scheme of arrangement. Upon completion of the demerger process, all SPTL shareholders will hold identical shareholdings in both companies.
Significant milestone
Pratik Agarwal, Managing Director, Sterlite Power Transmission Ltd, said, “This support from our stakeholders validates the strategic rationale behind the demerger. It is a significant milestone in our journey to create two future-ready businesses with distinct growth trajectories.”
Successful FY24
The GPS business capped off a successful FY 24 with cumulative order wins worth Rs.7,000 crore. It represented a 35% year-on-year (YoY) increase as compared to FY23, underscoring the growing global and domestic demand for robust power transmission infrastructure, particularly to support the integration of renewable energy sources.
Bright prospects
Sterlite Grid 5 Ltd is also well-positioned to capitalize on substantial growth in the transmission infrastructure business. A robust transmission pipeline of Rs.100,000 crore, including large-scale HVDC and green energy corridor projects, has been approved and will be bid out in the coming years under competitive bidding process. The fast pace of developments at the inter-state and intra-state level is providing a healthy pipeline and will improve evacuation for renewable energy projects under development.
Globally, the power transmission network is expected to double in the next 8 years to meet aggressive renewable energy additions. The demand for power products is expected to remain strong over the medium term on the back of healthy demand, amid aggressive global capex earmarked for renewables capacity addition, T&D expansion, benefits from ‘China+1’ theme and favourable tariff structures in the US, the release added.
Also read: Sterlite Power Appoints Reshu Madan As CEO, Global Products & Services Business
Featured photograph (source: Sterlite Power) is for representation only.
