Listed gaming and hospitality company Delta Corp Limited has announced its plan to divest its holding of its wholly-owned subsidiary Caravella Entertainment Private Limited, which in turn holds 89.28% stake in Deltin Nepal Private Limited.
Delta Corp has sold its entire stake to Kolkata-based gaming company Ability Games Limited (which operators online gaming website 11wickets and is the promoter of listed online game development company Yudiz Solutions and sports-content platform Crictracker) and Ashtek Consultancy Private Limited for a total enterprise value of Rs. 80 crores.
As per Delta Corp’s announcement to the stock exchanges, the valuation includes Caravella’s debt of Rs. 18 crores and equity consideration of Rs. 62 crores. The deal is expected to be completed by 8th March, 2024, and after completion, Deltin Nepal Private Limited will continue to have the right to use the “Deltin Casino International” and related trademarks for a transition period of two years.
By divesting its stake in Caravella Entertainment,Delta Corp Limited has stated that it aims to streamline its portfolio and focus on core objectives, aligning closely with its overarching vision for growth and sustainability.
Delta’s divesting of Deltin Nepal Casino comes at a time when the casino industry in India is facing considerable regulatory and taxation headwinds, with the implementation of 28% GST on initial deposits from 1st October, 2023. The company and its subsidiaries are also facing total GST showcause notices of over Rs. 23,000 crores from the Directorate General of GST Intelligence (DGGI). The High Courts of Calcutta, Bombay (Goa Bench) and Sikkim have however granted interim relief to the company against coercive steps in the matters. However, final outcome in these proceedings is awaited.
The company had also recently announced that it would be diversifying from its core business and once again foray into the real estate space in Goa and Mumbai along with Peninsula Land Limited with an earmarked investment of Rs. 250 crores.