NCLT Order on First Motion Application for Scheme of Arrangement to Demerge Paper Business
NCLT Allahabad Bench pronounced its order on 22nd September 2026 on the First Motion Application for the Scheme of Arrangement between Magnum Ventures (Demerged Company) and Magnum Paperz Limited (Resulting Company).
By ScoutQuest · · 3 min read
- NCLT Order Date
- 22nd September 2026
- Order Type
- First Motion Application for Scheme of Arrangement
- Demerged Company
- Magnum Ventures Limited
- Resulting Company
- Magnum Paperz Limited
- Business Split
- Paper Business to Magnum Paperz; Five Star hotel business (Country Inn & Suites by Radisson) to Magnum Ventures
What was shared
Magnum Ventures Limited intimated BSE and NSE that the National Company Law Tribunal, Allahabad Bench, Prayagraj pronounced its order on 22nd September 2026 on the First Motion Application in connection with the Scheme of Arrangement between Magnum Ventures Limited and Magnum Paperz Limited and their shareholders and creditors. The copy of the order was uploaded on the NCLT portal on 25th September 2026. This follows the company's earlier intimation dated 27 February 2026.
The two companies
- Magnum Ventures Limited is the Demerged Company. It runs two verticals: manufacturing paper and paper products from wastepaper at Sahibabad, Ghaziabad, and owning and operating a Five Star hotel under the brand "Country Inn & Suites by Radisson" at the same location, certified as an all-vegetarian Five Star hotel by HRACC, Ministry of Tourism.
- Magnum Paperz Limited is the Resulting Company, incorporated on 22nd September 2025 to carry on paper manufacturing and related activities. It is presently a wholly owned subsidiary of Magnum Ventures.
What a First Motion order means
The application was made under Sections 230 and 232 read with Section 66 of the Companies Act, 2013. At the first motion stage, the Tribunal deals with how shareholders and creditors are to be consulted. The companies sought dispensation of the meeting of Preference Shareholders of the Demerged Company and of the Equity Shareholders and Unsecured Creditors of the Resulting Company on the basis of consent affidavits, and asked the Tribunal to direct separate meetings of the Equity Shareholders, Secured Non-Convertible Debenture Holders, Secured Creditors and Unsecured Creditors of the Demerged Company through video conferencing with remote e-voting, along with appointment of a common Chairperson and Scrutinizer. The companies also proposed that if quorum is not present, the meeting be adjourned for 30 minutes and those present then be treated as proper quorum.
What the Scheme proposes
- The entire Paper Business, with its assets, liabilities, contracts, licences, employees, rights and obligations, would transfer to Magnum Paperz as a going concern.
- The residual Hotel Business would stay with Magnum Ventures.
- The share capital of the Demerged Company would be reduced proportionately to realign its capital structure with the scale and value of the retained hotel business. The company states this applies uniformly to all shareholders of the same class, with no change in inter-se shareholding pattern, voting rights or economic participation.
- The existing paid-up capital of Magnum Paperz, held by Magnum Ventures, would be cancelled and extinguished without separate consideration, and fresh shares would be issued to Magnum Ventures shareholders in the same proportion as their existing holding.
Why the company says it is doing this
The stated rationale is that paper and hospitality are inherently different businesses with distinct operations, risk profiles and regulatory needs. Separation is intended to give each vertical focused management, independent capital structures, flexibility for strategic alliances, easier fund raising and independent growth without exposing one business to the risks of the other.
What happens next
A first motion order relates to the process of convening or dispensing with meetings. The Scheme would still need to go through the prescribed approvals before it becomes effective. Shareholders should watch for notices of the meetings, the record-date related announcements and the second motion proceedings.
Also from Magnum Ventures
NCLT convenes meetings of shareholders, NCD holder and creditors on demerger Scheme
16 Oct 2026
Proceedings of 46th Annual General Meeting Held via Video Conferencing
25 Sep 2026
More numbers
- Adjournment period if quorum absent30 minutes
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