Veranda Learning Solutions , a prominent player in the education sector, has announced a significant restructuring plan that includes a merger and demerger of its business operations. The company's board has approved a plan to merge with Veranda XL Learning while simultaneously spinning off its commerce education business into a new entity, J.K. Shah Commerce Education.

Restructuring Plan Details

The board-approved restructuring plan involves a composite scheme of arrangement among Veranda Learning Solutions Limited, Veranda XL Learning Private Limited, and J.K. Shah Commerce Education Limited. The scheme includes two key components:

1. Merger: Veranda XL Learning Private Limited will be amalgamated into Veranda Learning Solutions Limited.
2. Demerger: The commerce education business of Veranda Learning Solutions will be demerged into J.K. Shah Commerce Education Limited.

Financial Impact

The commerce education division being demerged generated a turnover of ₹195.31 crore in the previous financial year, representing 41.48% of Veranda Learning Solutions' overall turnover.

Share Allocation

The restructuring will not involve the issuance of new shares for the merger. For the demerger, shareholders of Veranda Learning Solutions will receive shares in J.K. Shah Commerce Education Limited at a 1:1 ratio. For every one equity share of ₹10 face value held in Veranda Learning Solutions, shareholders will receive one equity share of ₹10 face value in J.K. Shah Commerce Education Limited.

Strategic Rationale

The company cited several strategic reasons for this restructuring:

1. Consolidation of operations for better resource utilization and economies of scale
2. Enhanced focus on the commerce education business through a separate entity
3. Improved operational efficiency and cost savings
4. Potential for attracting targeted investments in the commerce education segment

Listing Plans

Following the demerger, J.K. Shah Commerce Education Limited is proposed to be listed on both the BSE Limited and the National Stock Exchange of India Limited, subject to necessary approvals.

Regulatory Approvals

The restructuring plan is subject to various statutory and regulatory approvals, including those from shareholders, creditors, and relevant authorities.

Investor Meeting Announcement

Veranda Learning Solutions has scheduled an analyst and institutional investor meeting via video conferencing. The meeting will focus on discussing the demerger of the company's Commerce Education Business into the resulting company.

The session, organized by Go India Advisors, will feature key company participants including Executive Director & Chairman Suresh Kalpathi, Group COO Aditya Malik, and CFO Mohasin Khan. The company has confirmed that no unpublished price sensitive information will be discussed during the meeting, and any presentation materials will be disclosed to stock exchanges prior to the session.

This strategic move by Veranda Learning Solutions aims to streamline its operations, enhance focus on its core businesses, and create potential value for shareholders through specialized entities in the education sector. The upcoming investor meeting will provide further insights into the company's plans and strategies moving forward.

Veranda Learning Solutions Limited has successfully acquired the remaining 24% stake in Veranda XL Learning Solutions Private Limited (VXL), making it a wholly-owned subsidiary. This strategic move, completed on September 10, marks a significant milestone in Veranda Learning's expansion strategy.

Acquisition Details

The acquisition was executed through a combination of share swap and cash consideration:

Share Swap (12% Stake)

• Veranda Learning issued 20,16,124 new equity shares
• Issue price: ₹248.00 per share (face value ₹10.00, premium ₹238.00)
• Total value: ₹49.99 crore
• In exchange for 9,49,485 equity shares of VXL (12% of VXL's equity)

Cash Consideration (12% Stake)

• Acquired 9,49,485 equity shares of VXL
• Representing the remaining 12% of VXL's equity capital

Impact on Veranda Learning's Share Capital

The share swap has resulted in changes to Veranda Learning's paid-up equity share capital:

Strategic Implications

This acquisition gives Veranda Learning complete ownership and control over Veranda XL Learning's operations. The move is likely to streamline decision-making processes and potentially lead to improved operational efficiencies within the group.

Regulatory Compliance

The company has adhered to all necessary regulatory requirements:

• Obtained in-principle approvals from BSE and NSE
• Complied with SEBI Listing Regulations and ICDR Regulations
• The newly allotted shares will be subject to a lock-in period as per SEBI ICDR Regulations

Investor Information

The preferential issue was made to Mr. Jitendra Kantilal Shah, the sole investor in this transaction.

This strategic acquisition underscores Veranda Learning's commitment to strengthening its position in the education sector. Shareholders and market observers will likely be keen to see how this full ownership of VXL translates into value creation for Veranda Learning in the coming quarters.