Sterlite Power's Transmission Business Demerger Approved by Stakeholders

Sterlite Power Transmission Ltd (SPTL) announced on Thursday that its shareholders have approved the plan to demerge its transmission business. This restructuring will result in the transmission infrastructure being placed under a new entity, Sterlite Grid 5 Ltd, while SPTL will continue to manage the global products and specialized EPC services.

The demerger proposal received overwhelming support across the board, with secured creditors unanimously in favor, 99.26% of unsecured creditors approving, and nearly all equity shareholders (99.99%) voting in favor. Non-fund-based lenders also gave their unanimous support.

This strategic move is designed to streamline the company's structure, enabling each entity to attract investors that align with their specific financial needs. The transmission business, now under Sterlite Grid 5 Ltd, can appeal to long-term investors looking for stable cash flows. Meanwhile, SPTL, focusing on its Global Products & Services (GPS) division, can attract investors seeking higher returns, often those interested in pre-IPO or capital market opportunities.

Pratik Agarwal, Managing Director of SPTL, highlighted the significance of the stakeholders' support, stating that it underscores the strategic rationale behind the demerger. He emphasized that this milestone is crucial for developing two distinct business units, each poised for independent growth.

Sterlite Power is a prominent private sector developer in power transmission infrastructure and a provider of GPS services.