Total Pageviews

Friday, January 13, 2012

Thomas Cook denies move to sell stake

This story first appeared in DNA Money edition on Friday, January 13, 2012.

Thomas Cook India (TCIL) said its UK parent has no plans to sell stake in the Indian business.

Media reports had earlier indicated that the Indian unit’s founders—Thomas Cook UK and TCIM Ltd — have pledged their TCIL’s 77.1% stake in favour of Royal Bank of Scotland (RBS) and that RBS has been engaged to find a buyer for the Indian unit.

“Thomas Cook India will not comment on any market speculation,” a company spokesperson said.

In a media statement, Madhavan Menon, managing director, Thomas Cook (I) Ltd, said, “The creation of a pledge by Thomas Cook Group Plc is a standard requirement in procurement of its enhanced financial facilities. In fact, TCIL has been reaffirmed with a rating of A1+ for short-term borrowings and AA- for its long-term debt by Crisil. This is a clear indication of our strong and viable commercial standing. I would like to re-iterate that the statement issued by Thomas Cook Group Plc has no impact on TCIL’s financial position or operational performance.”

Thomas Cook India officials maintained that it is completely independent of the parent. The standalone entity and has no financial inter-dependencies with Thomas Cook Group Plc which is only a shareholder in the Indian unit.

According to Pawan Agrawal, director, Crisil Rating, the recent rating action on Thomas Cook India was a reaffirmation of an already existing one.

“Like any other rating, reaffirmation has been done after analysing the company’s business and financial risk profile on a standalone basis. We expect that the Indian entity will neither receive nor provide any financial support to its UK parent. TCIL has a healthy and stable business profile coupled with average debt protection metrics — this is indicated by a comfortable gearing of 0.85 times as at December 31, 2010 —the gearing continues to remain at similar levels at the end of September 2011 as well.”

Crisil also said that while the UK parent has a weak credit profile, the Indian entity continues to enjoy a good credit profile which is unlikely to be affected even if the sale happens. For nine months in 2011, TCIL registered net revenues of Rs286 crore and the profit figure stood at Rs51 crore.

Thomas Cook Group Plc had earlier said that a pledge has been created on the securities held by the promoters, TCIM Ltd and Thomas Cook UK Ltd in Thomas Cook (I) Ltd of their total shareholding of 163471449 shares, representing 77.11% of the issued share capital.

TCIL claims to have registered impressive growth in the last summer holiday season and will continue to see strong demand for all their products.

“Our forward bookings are showing strong demand on the holiday side as well. This development (pledging of shares) will have no impact on our business, people, customers, suppliers and the services we provide. We continue to operate business as usual,” said Menon.

No comments:

Post a Comment