News Orders & Deals Magnum Ventures Limited Board Approves Scheme of Arrangement for Paper Business DemergerMagnum Ventures Limited Board Approves Scheme of Arrangement for Paper Business Demerger
Magnum Ventures Limited's board approved a scheme of arrangement on 27th February, 2026, for demerging its paper business into Magnum Paperz Limited. The paper business, contributing Rs. 29,657.46 lakhs (75% of total turnover) in FY 2024-25, will be separated from hotel operations. Shareholders will receive 2 equity shares in Magnum Paperz for every 10 shares held in Magnum Ventures, with the scheme subject to regulatory approvals from stock exchanges, SEBI, shareholders, creditors and NCLT sanction.
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Magnum Ventures Limited's Board of Directors has approved a comprehensive Scheme of Arrangement for the demerger of its Paper Business into a separate entity, Magnum Paperz Limited. The board meeting held on 27th February, 2026, marked a significant step toward creating focused business structures for the company's distinct operational verticals.
Demerger Structure and Business Separation
The proposed scheme involves the demerger of Magnum Ventures' Paper Business, which encompasses manufacturing paper and paper products from wastepaper through facilities located at Sahibabad, District Ghaziabad, Uttar Pradesh. This business segment, referred to as the "Demerged Undertaking," will be transferred to Magnum Paperz Limited as a going concern.
| Business Segment: | Turnover (Rs. in lakhs) | Percentage of Total |
|---|---|---|
| Demerged Division (Paper Business): | 29,657.46 | 75% |
| Remaining Business (Hotel Operations): | 10,068.09 | 25% |
| Total: | 39,725.55 | 100% |
The demerger will effectively separate two inherently different business verticals - the paper manufacturing operations and the hotel business, which operates a Five Star Hotel under the "Country Inn & Suites by Radisson" brand.
Share Exchange Mechanism
The scheme establishes specific exchange ratios for both equity and preference shareholders:
| Share Type: | Exchange Ratio | Details |
|---|---|---|
| Equity Shares: | 2:10 | 2 new equity shares in Magnum Paperz for every 10 shares in Magnum Ventures |
| Preference Shares: | 9:10 | 9 new preference shares in Magnum Paperz for every 10 preference shares in Magnum Ventures |
Following the share issuance, Magnum Ventures will reduce its share capital proportionately - 70% reduction for equity shares and 90% reduction for preference shares.
Shareholding Pattern Changes
The demerger will result in significant changes to the shareholding structure of both entities:
Magnum Ventures Limited (Post-Scheme):
| Category: | Pre-Scheme Shares | Post-Scheme Shares | Ownership % |
|---|---|---|---|
| Promoter: | 3,77,67,554 | 1,13,30,266 | 55.21% |
| Public: | 3,06,43,763 | 91,93,129 | 44.79% |
| Total: | 6,84,11,317 | 2,05,23,395 | 100% |
Magnum Paperz Limited (Post-Scheme):
| Category: | Pre-Scheme Shares | Post-Scheme Shares | Ownership % |
|---|---|---|---|
| Promoter: | 10,000 | 75,53,511 | 55.21% |
| Public: | - | 61,28,752 | 44.79% |
| Total: | 10,000 | 1,36,82,263 | 100% |
Strategic Rationale and Benefits
The management has outlined several strategic advantages for the demerger:
- Focused Business Strategy: Creating independent business structures for each vertical to enable specialized management focus
- Operational Flexibility: Providing autonomy to pursue different strategic alliances and partnerships appropriate to each business
- Optimized Capital Structure: Enabling both entities to adopt capital structures aligned with their respective operational requirements
- Enhanced Resource Mobilization: Facilitating independent fundraising and strategic investor attraction based on individual business needs
- Risk Management: Allowing independent growth without exposing the entire organization to risks from other business segments
Regulatory Approvals and Listing
The scheme requires comprehensive regulatory approvals including consent from BSE Limited, National Stock Exchange of India Limited, SEBI, shareholders, creditors, and final sanction from the National Company Law Tribunal (NCLT). The company will apply for no-objection letters from stock exchanges under Regulation 37 and 59A of SEBI LODR Regulations.
Magnum Paperz Limited's equity shares will be listed on both BSE and NSE following the demerger completion, ensuring continuity of trading and liquidity for shareholders.
Impact on Existing Securities
The demerger will also affect the company's outstanding Non-Convertible Debentures (NCDs) listed on BSE and NSE. These NCDs, forming part of the Demerged Undertaking, will be transferred to Magnum Paperz Limited on the same terms and conditions, including coupon rate, tenure, redemption price, and security arrangements. The resulting company will obtain requisite listing approvals to ensure uninterrupted trading of these securities.
The scheme ensures equal treatment for all shareholder categories, with no special benefits accruing to promoters or promoter group companies. All treatments and exchange ratios are applied on a proportionate basis across promoter and public shareholders.
Historical Stock Returns for Magnum Ventures
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.09% | -7.17% | +7.88% | -11.72% | -27.73% | +253.82% |
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