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Thomas Cook to acquire LKP Forex
July 01, 2006 01:09 IST
Thomas Cook India announced on Friday that it signed a non-binding memorandum of understanding with LKP group to explore the merger of the latter's foreign exchange arm LKP Forex with itself.
The companies will appoint N M Raiji & Company as valuers to determine the share-swap ratio. The ratio will be announced in a month. The boards of these companies met separately today to take the decision.
The merger will be subject to approvals from shareholders of both companies as well as the Bombay high court.
"It's an unprecedented merger in the country's foreign exchange space wherein the largest player (Thomas Cook) is contemplating the merger of second largest (LKP Forex) with itself. It will enhance productivity and opportunities to do more business," said Madhavan Menon, managing director, Thomas Cook India.
On a consolidated basis, the merged entity will have 145 branches, Rs 200 crore in revenue and 1,800 employees.
Udayan Bose, chairman of the company, said: "It has been our endeavour to grow in the fields to our expertise. Foreign exchange is clearly an important part of our business and the proposed merger is a part of our growth plans in India, with the aim to maximise shareholder value and strengthen our leadership."Thomas Cook India has a revenue of Rs 160 crore crore with 65 branches.
The company has six overseas branches in Mauritius and four in Sri Lanka. LKP Forex, with a revenue of Rs 40 crore has 80 branches. In 2004-05, LKP Forex recorded a net profit of Rs 2.5 crore.
Thomas Cook has become more aggressive after it was taken over by Dubai Financial LLC from the erstwhile promoter Thomas Cook AG of Germany.
The Dubai firm acquired 60 percent in Thomas Cook in early 2006 for an estimated Rs 423 crore. Dubai Financial LLC is a subsidiary of Dubai Investment Group.