Adani Wilmar demerged from Adani Enterprises
The Adani Enterprises (AEL) Board, on Thursday, approved the demerger of its food FMCG business to Adani Wilmar (AWL) along with AEL’s strategic investment in Adani Commodities, a move that will bring Adani Wilmar directly under the control of Adani promoter group, paving the way for a potential stake sale.
The food FMCG business had become self-sustained, performing well and was poised for further growth under Adani Wilmar, the company said. For Adani Enterprises, this restructuring will not only “unlock the value for shareholders but also allow focused strategy for sustainable growth in its incubating businesses,” it added.
Shareholders of AEL will receive 251 shares of AWL for every 500 shares held. AWL is already a listed entity and AEL holds 43.94 per cent stake in it. With the demerger AEL shareholders including promoter and promoter group shareholders will hold shares of Adani Wilmar directly and it will cease to be the joint venture entity of AEL.
Promoter stake
Post the demerger the promoter stake in Adani Wilmar, including Wilmar International will be reduced to 76.7 per cent from 87.8 per cent now. “This demerger is in line with AEL’s incubation strategy which includes demerging of the business once it is self-sustained and properly established. In the past, AEL has demerged businesses including Adani Green Energy, Adani Energy Solutions once they became self-sustaining,” the company explained.
In the rationale for the demerger the company explained that each of the varied businesses being carried on by AEL either by itself or through its subsidiaries or through associate companies including food FMCG business had significant potential for growth and profitability. The risks, competition, challenges, opportunities and business methods for this business were separate and distinct from other businesses being carried out by the company.
They were all capable of attracting a different set of investors, strategic partners, lenders and other stakeholders. The restructuring would allow enhanced focus to the operation of the businesses.