NCLT approves demerger of Emaar MGF Land Ltd
National Company Law Tribunal has approved the proposed demerger scheme of Emaar MGF Land Ltd that will pave the way for joint venture partners Dubai’s Emaar Properties and India’s MGF Development go separate ways.
Approving the scheme, the tribunal said the “liabilities and duties” related to the assets demerged from Emaar MGF Land would be vested with the resultant company– MGF Developments.
In a 14-page order, NCLT said that “all the property, rights and powers of the demerged undertaking of the demerged company be transferred… to the resulting company”.
Under the scheme, demerged company is Emaar MGF Land Ltd while resulting firm is MGF Developments Ltd. The demerged undertaking includes part of the construction and development business of Emaar MGF Land.
As per the scheme, the development right of 1,685 acres would be transferred to MGF Developments. The scheme provides for consequent issue of shares by the MGF Developments to the shareholders of the Emaar MGF Land, except to the extent shares held by the resulting company in the demerged company.
As per the scheme, MGF Developments would issue 9 equity shares of Rs 10 each for every 416 shares held in the Emaar MGF Land, as a consideration for the demerger of the demerged undertaking, to shareholders of the JV firm. All the shareholders of Emaar MGF Land would become the shareholders of MGF Developments as per the ratio given in the scheme. Various present and future liabilities will get transferred to MGF Development including Rs 713 crore of debentures of Emaar MGF Land Ltd, sources had said.