Hathway Cable and Datacom, one of India's leading Multiple System Operators, announced to demerge its broadband business into Hathway Broadband, a wholly owned subsidiary of the company.

The company said, "The Boad of Directors of the company have approved to demerge, transfer and vest the company's entire broadband business into Hathway Broadband."

The carve out of the broadband business is aimed at accelerating value creation for the Hathway shareholders. The seperation will allow the company to aggresively focus on the significant growth potential for high speed data and related services.

Jagdish Kumar, MD and CEO of the company said, "The restructuring recognises that the market dynamics of the broadband business are unique as compared to our parent cable television business. The seperation is a step towards customer focus and market competitiveness and in delivering a superior value preposition to our subscribers."

However, the demerger will be subject to requisite approvals from the shareholders, creditors, High Courts, Telecom Department, stock exchanges, Securities and Exchange Board of India and other regulatory and governmental authorities.

The Board of Directors have also approved to increase limit for borrowing loans in excess of paid capitals and free reserves to Rs 18 bn from the existing Rs 16 billion.

Also, the Board of Directors have approved to increase limit for creating charge over the assets of company for borrowing loans to Rs 18 bn from the existing Rs 16 billion.

Shares of the company gained Rs 4.55, or 11.1%, to trade at Rs 45.55. The total volume of shares traded was 476,844 at the BSE (2.29 p.m., Thursday).