K.M. Sugar Mills Ltd. has announced comprehensive meeting schedules for the approval of its proposed demerger scheme with KM Spirits and Allied Industries Limited. The company has released detailed documentation following directions from the National Company Law Tribunal, Allahabad Bench.

Meeting Schedule and Voting Arrangements

The company has scheduled meetings on May 30, 2026, to seek approval for the demerger arrangement:

Both meetings will feature remote e-voting facilities, with the cut-off date set for Friday, October 31, 2025. Remote e-voting will commence on Wednesday, May 27, 2026, at 9:00 AM (IST) and conclude on Friday, May 29, 2026, at 5:00 PM (IST).

Demerger Structure and Share Entitlement

The proposed scheme involves the demerger of K.M. Sugar Mills Limited's Distillery Division into KM Spirits and Allied Industries Limited. Under the arrangement:

Regulatory Approvals and Documentation

The company has secured necessary regulatory clearances, including no-objection letters from both BSE Limited (dated January 13, 2026) and National Stock Exchange of India Limited (dated January 12, 2026). The NCLT order dated March 24, 2026, has dispensed with the requirement of convening a meeting of secured creditors.

Business Rationale and Strategic Benefits

The demerger aims to unlock shareholder value through several strategic initiatives:

• Operational Focus: Establishing an independent entity for the Distillery Division to enable sector-specific opportunities and enhanced operational efficiency
• Strategic Flexibility: Providing greater flexibility to tailor approaches specific to unique operational and market dynamics
• Value Creation: Enabling independent market-driven valuation through separate listing of the Resulting Company
• Risk Mitigation: Separating businesses with distinct risk and return profiles to attract different investor sets

Financial Overview

The Distillery Division being transferred includes:

Meeting Governance Structure

The NCLT has appointed Sri Harnam Singh Thakur as Chairperson and Mr. Deependra Mohan as Alternate Chairperson for the meetings. Mr. Ankit Kumar Singh has been designated as the Scrutinizer. Company Secretary and Compliance Officer Ritika Tandon has signed the communication on behalf of the company.

The comprehensive documentation includes 19 annexures covering financial statements, valuation reports, fairness opinions, and regulatory correspondence. Shareholders can access the complete notice and accompanying documents through the company's website at www.kmsugar.com .

Source: None/Company/INE157H01023/759aa22e-62ae-467f-bd47-4bb03469eac5.pdf

KM Sugar Mills Limited has achieved a significant milestone in its corporate restructuring initiative, receiving approval from the National Company Law Tribunal (NCLT) Allahabad Bench for the first motion application of its proposed scheme of arrangement. The company received the NCLT order dated March 24, 2026 on March 27, 2026, marking a crucial step forward in the demerger of its distillery division.

NCLT Order Details

The NCLT Allahabad Bench, comprising Member (Judicial) Sh. Praveen Gupta and Member (Technical) Sh. Ashish Verma, has directed the company to proceed with specific stakeholder meetings while providing certain dispensations:

The tribunal has appointed Sri Harnam Singh Thakur as the common Chairperson for the meetings, with Mr. Deependra Mohan as the alternate Chairperson and Mr. Ankit Kumar Singh as the scrutinizer. The meetings will be conducted through video conferencing with remote e-voting facilities.

Demerger Structure and Share Entitlement

The scheme involves the demerger of the distillery division from KM Sugar Mills Limited (demerged company) to KM Spirits and Allied Industries Limited (resulting company), which is a wholly-owned subsidiary incorporated specifically for this purpose. The share entitlement ratio has been established as follows:

Stakeholder Composition

The NCLT order provides detailed information about the stakeholder structure for both companies:

KM Sugar Mills Limited (Demerged Company):

• Equity Shareholders: 54,359 (listed company)
• Secured Creditors: 5 (96.23% consent received)
• Unsecured Creditors: 414

KM Spirits and Allied Industries Limited (Resulting Company):

• Equity Shareholders: 7 (100% consent received)
• Secured Creditors: Nil
• Unsecured Creditors: 2 (100% consent received)

Business Rationale and Benefits

The demerger aims to separate two distinct business divisions with different operational characteristics, regulatory environments, and growth prospects. The distillery division, which manufactures and distributes rectified spirit, ethanol, country liquor, and extra neutral alcohol, has matured into a robust independent business with substantial growth potential.

Key benefits outlined in the scheme include:

• Enhanced operational efficiency through focused management
• Strategic flexibility for sector-specific opportunities
• Unlocking shareholder value through independent market valuation
• Attraction of different investor sets for each business vertical
• Greater transparency in performance metrics

Regulatory Approvals and Compliance

The company has secured necessary approvals from stock exchanges, with both NSE and BSE issuing observation letters on January 12, 2026 and January 13, 2026 respectively, confirming no objection to the proposed scheme. The board of directors of both companies approved the scheme on August 7, 2025.

Next Steps

Following the stakeholder meetings scheduled for May 30, 2026, the company will need to file the second motion petition within seven days of the chairperson's report submission. The scheme requires final sanction from the NCLT before implementation, with the appointed date set as April 1, 2026.