Cox & Kings announced after market hours yesterday, 30 May 2017, that its board approved the demerger of its foreign exchange division into a separate financial services company to be named Cox & Kings Financial Service (CKFSL). The demerger is effective 1 April 2017, and is subject to High Court and other regulatory approvals.
Whilst the tours & travels and foreign exchange ('Forex') businesses are complementary in nature, the businesses operate quite distinctly from each other. The forex business has 125 licenses across India to provide foreign exchange to captive customers as well as to third-party customers.
The working capital needs of the forex business are quite different from those of the tours & Travels business. With a view to enable the Forex business to capitalize on growth opportunities in an independent manner it has been decided to demerge the business into a separate company.
The demerged entity has the potential to grow substantially as a standalone business with separate financing and operations and focused leadership and management attention. The opportunities as well as risks and competitive environment within the forex business are distinct and the said business is capable of attracting its own set of investors and strategic partners, lenders and other stakeholders.
It is proposed that the forex business of the company be demerged and transferred to the resulting company, a wholly-owned subsidiary company of the company, so as to maximize value for all the stakeholders of the Company. In consideration of the demerger, equity shares of the resulting company shall be issued to the equity shareholders of the company, on the agreed terms and conditions as set out in the draft scheme.
CKFSL is also in the process of applying for a license to operate as a non-banking finance company (NBFC) and will add multiple product lines to its suite of offerings over time, including holiday finance, overseas student finance etc. aimed primarily at the travel and tourism sector.
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With the number of outbound travellers from India due to touch 50 million by 2020 (as per UNWTO) from approximately 21 million currently, there is a substantial and unique opportunity for the newly minted company to grow rapidly at high rates of profitability.
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MOIL's net profit surged 410.94% to Rs 109.24 crore on 19.76% increase in total income to Rs 252.71 crore in Q4 March 2017 over Q4 March 2016. The result was announced after market hours yesterday, 30 May 2017.
McLeod Russel India announced after market hours yesterday, 30 May 2017, that its board deliberated on the strategic roadmap for the company's participation in a joint venture with Eveready Industries India for development of packet tea business.
The board has decided that the company will initiate discussion with Eveready for participating in a joint venture as a strategic business partner for development of packet tea business through a separate entity.
It is envisaged that with this measure, Eveready and McLeod will bring their respective skills of marketing & distribution and tea plantation knowledge to focus and develop the packet tea business to a much higher level.
McLeod is the world's largest tea plantation company in private sector. This will enable the company to have direct access to the Rs 10000 crore packet tea market. Eveready is a consumer goods company with a large distribution reach. This alliance will enable it to upscale its FMCG operation.
Both McLeod and Eveready belong to the Williamson Magor Group and the strategic alliance is subject to all necessary approvals.
Gujarat Gas announced after market hours yesterday, 30 May 2017, that it entered into a non-binding memorandum of understanding with Petronet LNG for exploring - dispensing and marketing of LNG including the L-CNG at Gujarat Gas CNG stations.
Berger Paints India announced after market hours yesterday, 30 May 2017, that its board approved acquisition of 100% of the paid-up equity share capital of Saboo Coatings (SCPL) from its existing shareholders at a consideration of Rs 81.77 crore, subject to closing adjustments for variations in net debt and net working capital.
SCPL is engaged in carrying out the business of manufacturing specialty liquid coatings classified as 'Industrial Coatings' by the paint industry in the segments of agriculture and construction equipment (ACE), automotive (auto components, auto re-finish), fans, electronics, general industrial, elevators, handicrafts and home furnishing, hardware and those used by industrial dealers for substrates metal, plastics, FRP and glass in India. The gross turnover (including other income) of SCPL in the year 2016-17 was Rs 89.43 crore.
The business and the expertise of SCPL will gainfully supplement the company's industrial coatings business where the two entities can support each other in various areas such as manufacturing, selling, distribution, procurement, technology, etc., thus resulting in mutual benefit to both the companies. The transaction is likely to be completed by 30 June, 2017, subject to fulfillment of conditions precedent.
At the meeting, the board also approved purchase of 1.03 crore equity shares of Saboo Hesse Wood Coatings (SHWCPL), representing 51% of the paid-up equity share capital of SHWCPL at a consideration of Rs 1.5 crore. The balance 49% is held by Hesse Shares GmbH of Germany.
The business and the expertise of SHWCPL can gainfully supplement the company's existing wood coatings business, where the two entities can combine their strengths and collaborate in the areas of manufacturing, selling, distribution, procurement, technology, etc., resulting in mutual benefit to both the companies.
The transaction is likely to be completed by 31 August, 2017 subject to limited due diligence, approval of the Reserve Bank of India, if required, and parties agreeing on the terms of acquisition.
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