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CESC Ltd is expecting its demerger process to be under way, post the final hearing of the NCLT in March. The effective date of demerger, however, will be in October.
As per the proposed plan, the RP Sanjiv Goenka Group flagship, CESC Ltd will demerge its businesses in four different companies — power generation, electricity distribution, retail (Spencer’s Retail) and other ventures.
CESC will handle the electricity distribution business of the Group. According to Sanjiv Goenka, Chairman, CESC has already got the necessary regulatory and shareholder clearances. “The final hearing is due at NCLT in March. All other clearances are in place,” he told reporters during a press conference.
Au Bon Pain
Meanwhile, the Group has already exited its QSR venture with the US-based cafe chain Au Bon Pain.
Au Bon Pain Cafe India Ltd, a step-down subsidiary of CESC, was brought into India by Goenka’s daughter, Avarna Jain. Au Bon Pain opened its first store in Bengaluru in 2009.
While, the group Chairman, confirmed the exit, he did not cite reasons.
However, sources say, the bone of contention was the non-availability of Indian items on Au Bon Pain’s menu.
As per 2016-17 annual report of CESC Ltd, which is the parent company of Spencer’s Retail, Au Bon Pain had 29 cafes in Bengaluru, Kolkata and Delhi at the end of fiscal 2016-17.
According to Goenka, Spencer’s Retail – the organised retail format of the Group – has reported a ₹7-crore profit before depreciation and tax for the October to December quarter of this fiscal. Turnover for the quarter under review stood at ₹570 crore. The per sq feet sales too, improved to ₹1,607.
“We are hopeful that Spencer’s will turn profitable from Q1 of next fiscal (April to June),” he said.
The focus for the retailer will continue to be high margin offerings that include its apparel brand, ‘2BMe’ and other daily use items.
Meanwhile, CESC reported a near flat net profit of ₹154 crore for Q3 FY18 (Oct-Dec period) against ₹152 crore.
Revenue from operations during the quarter under review saw a 5 per cent increase to ₹1,706 crore (₹1,620 crore).
“We were not able to hike electricity tariffs as a result of which profit has been near flat,” Goenka said.
On Thursday, the CESC scrip closed at ₹992.15, up by 1.29 per cent, on the BSE.
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