Travel services firm Thomas Cook Group plc said on Wednesday it has formally launched a sale process for its 77.1 per cent stake in the public listed India unit, Thomas Cook (India) Limited. At current market price the sale could fetch the British firm Rs 880 crore or $178 million, helping reduce debt on the balance sheet of the parent firm.
"Thomas Cook has received a number of unsolicited informal expressions of interest from third parties to acquire its stake in Thomas Cook India and, as a result, has decided to formalise the process," said a
statement to the exchanges.
Thomas Cook India says it is the largest integrated foreign exchange and travel services company in the country. Its services include foreign exchange, outbound and inbound leisure travel, corporate
travel and insurance.
The share price of Thomas Cook India rose 19.91 per cent to hit the upper circuit and closed at Rs 53.9 today. At this price, the market capitalisation of the company has touched Rs 1,142.68 crore. Thomas Cook India had reached a 52-week high of Rs 62.2 a share last April.
Earlier reports had suggested that India's Cox & Kings Ltd, besides buyout firms like KKR, Bain Capital, Actis and Carlyle could be possible bidders. Thomas Cook Group reported a loss of $144 million in the
last three months of 2011, with current debt of around $1.4 billion.
The firm has started asset sales to deleverage its balance sheet and has already sold its stake in Spanish hotel chain Hoteles Y Clubs De Vacaciones (HCV) for $95 million.
For the first nine months of calendar year 2011, Thomas Cook India reported an increase of 21.9 per cent in net income from operations of Rs 250.25 crore as compared to the same period last year, with net profit up 46 per cent to Rs 51.74 crore.
"Following a number of unsolicited informal expressions of interest, we have decided to seek formal offers for our stake in Thomas Cook India. If the offers are attractive then we will consider selling our
stake and using the proceeds to continue to strengthen the Group's balance sheet. TCIL is a strong business operating in an attractive market. Both the business and the market are growing and Thomas Cook will only sell its stake if a compelling offer is received," said Sam Weihagen, chief executive of Thomas Cook.
Thomas Cook India has had operations in India for over a century, with presence in 70 cities across 153 owned locations. It employs over 2,700 staff and also has overseas operations in Mauritius and Sri Lanka.
