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Saturday, February 11, 2012

‘Credit Suisse will steer Thomas Cook foreign exchange business sale’

This story first appeared in DNA Money edition on Tuesday, February 7, 2012.

UK-headquarterd Thomas Cook Group has appointed Credit Suisse Group to sell off its foreign exchange business in India, according to a Sunday Times report. The paper didn’t divulge the source though.

The tour operator is learnt to be pushing ahead with divestments of its non-core assets to raise £200 million in an attempt to lighten its debt load and shore up the balance sheet. Repeated calls and an e-mail seeking clarifications to the management went unanswered.

All along, the company has been in a denial mode. In a statement last month, Madhavan Menon, MD, Thomas Cook (India) (TCIL), had said the UK parent has no plans to sell its stake in the Indian entity. Media reports had earlier indicated that the Indian unit’s founders — Thomas Cook UK and TCIM — 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.

On speculation in the British media about the parent company selling its foreign exchange business, reports had earlier quoted Menon saying, “We do not have such plans.”

TCIL’s foreign exchange business mainly deals in small-value remittance with Thomas Cook Express and money transfers with Moneygram or Express Money.

In 2006, the travel company had acquired LKP Forex and has over the years expanded its operations to 72 cities from the earlier 17.
Forex operations contribute approximately 65% of TCIL’s revenue. The company currently enjoys a sizeable market share — close to 50% — in the business and is witnessing a growth of 9-10%.

Thomas Cook swung to an annual loss last year after a series of profit warnings and the resignation of chief executive Manny Fontenla-Novoa in August. The mass-market travel group has taken a big blow from the economic slump, as consumers increasingly turn to the Internet to book their own vacations.

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