Unitech eyes demerger

Unitech said it has appointed Ernst & Young to unlock value for shareholders.

Realty major Unitech said it has appointed Ernst & Young and two other advisors for exploring opportunities for potential restructuring of its businesses to unlock value for shareholders.

Further,the company’s board of directors has constituted a ‘restructuring committee’ for evaluating opportunities for “potential merger of subsidiaries,demerger and other forms of restructuring,or acquisition,or spin-off with the ultimate object of enhancing and unlocking shareholders’ value.”

The board,in its meeting,has appointed Ernst & Young,S R Batliboi & Co and Amarchand & Mangaldas & Suresh A Shroff & Co as advisors to assist the restructuring committee in the proposed corporate restructuring,Unitech said in a filing to the BSE.

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Earlier,industry sources had said the realty major is planning to demerge its non-core businesses of telecom and hotels.

The new infrastructure company would include Unitech’s telecom,hotel,SEZ and construction businesses,sources had said.

Unitech also plans to list the new company,sources had said,adding that the company’s shareholders would get shares in the new firm at a swap ratio,which will be decided in due course.

“The objective is to unlock the value of non-core businesses for Unitech shareholders. The current market price does not reflect the value embedded in the various non-core businesses of the company,” a source had said.

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Shares of Unitech Ltd were quoting at Rs 76.80,higher by 0.46 per cent in afternoon trade on the Bombay Stock Exchange.

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