CESC drops plan to demerge power generation and distribution business

CESC has decided not to pursue the demerger of its power generation and distribution business, which it had earlier planned.

In a filing with the BSE, CESC said: “The board of directors, at its meeting held today, inter alia, discussed the present status of the demerger and decided that it would be prudent and in the best interest of the company that its shareholders and other stakeholders no longer pursue the said demerger.” Demerger of these two lines of business into CESC (distribution company) and Haldia Energy (generation company) had met with opposition from the West Bengal Electricity Regulatory Commission (WBERC).

It had flagged concerns over asset distribution between the two firms in the case of a demerger, and had questioned if the demerged entities had received any favour from parent CESC. The power regulator refused to approve CESC’s planned power purchase agreement in case of a split.