The shares of Lloyd Electric and Engineering Limited tanked over 13% on Monday after the company notified the BSE that it had sold its consumer electronics arm to Havells India.
The shares of Lloyd Electric and Engineering Limited tanked over 13% on Monday after the company notified the BSE that it had sold its consumer durables business to Havells India.
On the BSE, Havells shares were trading at Rs 283.55, down Rs 44.35 or 13.51% lower from previous close.
In a notification to the stock exchange, Lloyd Electric said it had entered into an agreement with Havells Inida for the sale of its Consumer Durables Business together with all the rights, title, interest and asset, licenses, intellectual property including the brand, logo, trademark "Lloyd" for a transaction value of Rs 1,550 crore subject to satisfactory due diligence and closing conditions.
Commenting on the acquisition, Lloyd director Brij Raj Punj said, "in the light of the changing economic scenario and due to increasing competitive enironment, the Consumer Durable Business of the Company has reached a stage where substantial growth capital would be needed to create and sustain further growth momentum, which in the present circumstances would not be possible for the company to invest as this would substantially increase the elverage on the company's balance sheet and would involve a huge risk especially in light of the high competitive intensity in the Consumer Durable industry."
The proceeds from the sale of the business (Rs 1,550 crore) would be "partially utilised towards downsizing the over-leveraged balance sheet by reducing the working capital debt and also towards investing in high potential and high margin businesses in the B2B segment among others," the company told the BSE.
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