The Hindu Business Line : Tie-up talk peps up LKP Merchant

After some Indian broking and merchant banking firms obtaining fascinating valuation for buy-out or part stake sale recently, market grapevine hints at such possibilities in the case of LKP Merchant Financing. The merchant banking outfit has been undergoing a major restructuring and market has speculated that it would eventually leverage its enhanced valuation by roping in a strategic partner. The Executive Chairman of the company, Mr Mahendra V. Doshi, told Business Line that the company may look into such possibilities, after the restructuring process was completed, sometime in December this year. The company has sold its forex business to Thomas Cook (India). As part of the compensation package, it obtained redeemable preference shares of Thomas Cook (India) Ltd, aggregating to Rs 95.43 crore. These are scheduled for redemption in December this year, when the company wants to pay off a debt of Rs 90 crore. “This would clean up our balance sheet,” Mr Doshi added. Incidentally, LKP also got 14,94,900 shares of Rs 10 each of Thomas Cook (subsequently split into 1,49,49000 shares of Re 1 each) representing around 11 per cent of that company. It is also acquiring two broking outfits having the NSE and BSE membership, making them subsidiaries. This process is likely to be completed in a month’s time. In the last financial year, LKP had undertaken a one-time settlement of dues with a bank and a financial institution to get rid of major secured loans on its books. The shares of the company ended Rs 92.45, up around 4 per cent. In the last one week it has moved up by around 5 per cent.

Jayanta Mallick

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