K.M. Sugar Mills Ltd. Schedules Shareholder and Creditor Meetings for Demerger Scheme Approval on May 30, 2026

K.M. Sugar Mills Ltd. has announced the finalized schedule for critical meetings required to approve its proposed demerger scheme with KM Spirits and Allied Industries Limited. The company informed stock exchanges about the meeting dates following directions from the National Company Law Tribunal, Allahabad Bench.

Meeting Schedule and Details

The company has scheduled two separate meetings on May 30, 2026, to seek requisite approvals for the demerger arrangement:

Meeting Type: Date: Time: Equity Shareholders Saturday, May 30, 2026 11:00 AM (IST) Unsecured Creditors Saturday, May 30, 2026 12:30 PM (IST)

Both meetings will be convened pursuant to the order dated March 24, 2026, passed by the Hon'ble National Company Law Tribunal, Allahabad Bench. The tribunal has dispensed with the requirement of convening a meeting of secured creditors for this demerger scheme.

Demerger Arrangement Structure

The proposed scheme of arrangement involves the demerger between K M Sugar Mills Limited, which will serve as the demerged company, and KM Spirits and Allied Industries Limited, designated as the resulting company. The arrangement requires approval from both equity shareholders and unsecured creditors of K M Sugar Mills Limited.

Regulatory Compliance

The company has made this disclosure under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. This follows the company's earlier disclosure dated March 27, 2026, regarding the receipt of the NCLT order.

The company has indicated that formal notices for the aforementioned meetings will be circulated to stakeholders in due course. Company Secretary and Compliance Officer Ritika Tandon signed the communication to stock exchanges on behalf of K M Sugar Mills Limited on April 25, 2026.

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:

Meeting Type Requirement Date & Time Dispensation Equity Shareholders Required May 30, 2026 at 11:00 AM No Secured Creditors Dispensed N/A Yes (96.23% consent received) Unsecured Creditors Required May 30, 2026 at 12:30 PM No

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:

Parameter Details Share Entitlement Ratio 1:5 Resulting Company Share ₹10.00 face value Demerged Company Shares ₹2.00 face value (5 shares) Appointed Date April 1, 2026

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.

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