Vikas Lifecare is set to acquire Kohinoor Food and both the counters traded mixed in Tuesday’s trade. The company board of Kohinoor Foods reviewed and approved the proposal of Vikas Lifecare for strategic investment, whereas its earnings for the quarter ended on December 31 disappointed the street.
The board has reviewed the proposal of Vikas Lifecare for strategic investment in the company to the tune of Rs 250 crore and accorded its approval to enter into a memorandum of understanding (MoU) with Vikas Lifecare, the company said in its exchange filing.
The objective of MoU is to settle the company’s bank debts and future business growth, subject to receipt of bankers’ NOC, and other applicable regulatory/statutory approvals, in accordance with applicable laws, including the SEBI Regulations, the filing said.
A definitive agreement to formalize the transaction shall be entered into after completion of the due diligence process and as per the structure suggested by the intermediaries appointed for the transaction, with the consent of the board of directors of both entities, subject to all regulatory approvals, it added.
Shares of Kohinoor Foods were trading marginally down at Rs 68.10 on Tuesday over a previous close of Rs 69.05. The stock has jumped about 30 per cent in the last one month over the acquisition buzz. In the last one year, the stock has delivered multibagger returns of 750 per cent.
Shares of Vikas Lifecare opened slightly higher today before the stock pared up its early gains to trade at Rs 4.14 at 11.15 am. Shares of the specialty chemical players had settled at Rs 4.20 on Monday.
Kohinoor Foods reported a net loss of Rs 13.85 crore in the December 2022 quarter on the back of higher finance costs, which was a net profit of Rs 0.41 crore in the year-ago period. Its revenue from operations also declined to Rs 16.81 crore from Rs 22.61 crore during the period under review.
Also read: Adani group stock: 4 reasons why Adani Ports shares rallied 51% in 3 days
Also read: Tata Steel shares slip on surprise Q3 loss; time to buy, sell or hold?