Adani Enterprises Unveils SMRPL-MEL Amalgamation Plan

On June 3, 2024, Adani Enterprises informed in an exchange filing that the board of directors of Stratatech Mineral Resources Private Limited (SMRPL), a wholly-owned subsidiary of the Company, has approved a proposed Scheme of Amalgamation (Scheme) under sections 230 to 232 and other applicable provisions of the Companies Act, 2013, along with the associated rules and regulations.

This scheme involves the amalgamation of Stratatech Mineral Resources Private Limited with Mahan Energen Limited (MEL), a wholly-owned subsidiary of Adani Power Limited. Therefore, upon the proposed scheme becoming effective, SMRPL will cease to be a subsidiary of Adani Enterprises.

The proposed Scheme is subject to necessary approvals from the shareholders and creditors of both the Transferor and Transferee Companies, as well as the Jurisdictional Bench of the National Company Law Tribunal (NCLT) and any other required statutory and regulatory approvals.

The said transaction is being conducted at an arm’s length basis based on the valuation report from the independent Registered Valuer u/s 248 of the Companies Act 2013.

Details of the Transferor and Transferee Companies

The Transferor Company, i.e., Stratatech Mineral Resources Private Limited, is involved in the business of mining coal, minerals and ores and other related activities. As of March 31, 2024, the net worth of SMRPL is -₹622.37 lakh.

The Transferee Company, i.e., Mahan Energen Limited, is involved in generating and selling power. As of March 31, 2024, the net worth of MEL is ₹2,90,175 lakh and reported a turnover of ₹3,76,984 lakh.

Objective of the Amalgamation

Regarding the objective of the amalgamation, Adani Enterprises stated that the transferor company and the transferee company are part of the Adani Group.

The Transferor Company, which has been allocated the Dhirauli coal mine, operates in the Commercial Mining segment under Adani Enterprises Limited’s Natural Resources (NR) vertical. This segment is gradually transitioning towards the development and operation of mines (MDO business model).

For Adani Enterprises, the proposed merger scheme will free up equity and management resources, allowing for their redeployment in the MDO business. This business carries lower price risk, offers long-term revenue visibility, and maintains good margins. The company is actively evaluating upcoming opportunities in the MDO segment to leverage its management capabilities and enhance its ESG parameters.

MEL, the Transferee Company, is engaged in generating and selling power. The proposed scheme will enable MEL to operate the Dhirauli coal mine as a captive coal mine, thereby improving its fuel security with seamless and flexible sourcing capabilities.

Mahan Energen Limited shall issue and allot to the equity shareholder(s) of Stratatech Mineral Resources Private Limited 1,841 Redeemable Preference Shares of ₹10 each, credited as fully paid-up, for every 2 equity shares of the face value of ₹10 each fully paid-up held by such equity shareholder(s) in Stratatech Mineral Resources Private Limited.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.