Shares of Delta Corp were off to a flier on Wednesday after the company laid out plans to spin off and list a new entity in a move to separate its hospitality and real estate business from gaming.

What Happened: Delta Corp said after market hours on Tuesday that its board of directors has approved the demerger of its hospitality and real estate business through a Composite Scheme of Arrangement.

This strategic move will allow Delta Corp to streamline its focus on gaming and online entertainment, while the newly incorporated Delta Penland will manage its hospitality and real estate operations.

Delta Penland will continue the company's hospitality and real estate activities. Under the proposed demerger, shareholders of Delta Corp will receive one equity share in Delta Penland for every share they hold in Delta Corp, ensuring shareholders maintain the same ownership ratio in the newly formed company.

Delta Penland's shares will be listed on stock exchanges, giving shareholders liquidity and a focused investment vehicle for the hospitality and real estate sectors.

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The demerger process is expected to take 10 to 12 months to complete, subject to approvals from shareholders, stock exchanges, the Securities and Exchange Board and the National Company Law Tribunal (NCLT).

The company assured that the demerger would not materially impact the company's employees, customers or business partners during the transition.

The company’s financials have taken a hit since the government imposed a 28% tax rate on online gaming and casinos. 

Delta Corp's hospitality and real estate assets include notable properties like the Deltin Suites, a 106-room all-suite hotel with a casino in Goa, and The Deltin, a five-star deluxe resort in Daman with 176 rooms.

The company's under-construction projects, such as the Marvel Resorts, a 440-room hotel in Goa, and a proposed integrated resort with a water park on 88 acres in Dhargalim, Goa, will also be transferred to Delta Penland. Additionally, the company's investments in other hospitality and real estate ventures will be part of the demerged entity.

Price Action: Delta Corp’s share price was up 5.7% at ₹136.85 near the start of trade on Wednesday.

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