Demerger scheme of Emaar MGF Land Ltd approved
National Company Law Tribunal (NCLT) 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…

National Company Law Tribunal (NCLT) 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. Dubai’s realty major Emaar Properties and India’s MGF Developments decided to end their 11-year-old joint venture (JV) in April 2016.

Emaar Properties, which entered India in 2005 with largest foreign direct investment (FDI) in the realty sector, has invested about Rs85 billion in the Indian real estate market through the joint venture.

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. “All the liabilities and duties of the demerged undertaking of the demerged company be transferred without further act or deed to the resulting company…,” the order said.

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 Rs10 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.

(ends)

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