Royal Bank of Scotland (RBS) has appointed investment banker Credit Suisse First Boston to sell 77.11% in Thomas Cook India (TCIL), a subsidiary of British travel and tour operator Thomas Cook Group, a person with direct knowledge of the development said. The parent had pledged the stake as collateral with the bank to borrow money.
?TCIL?s operations are independent of the parent company and its financial stress is not shared by us,? a senior TCIL official said. ?It will be difficult for me to comment on whether they would need to sell of this asset or not. Our business is profitable and growing strong,? the same official said on condition of anonymity. ?We are an asset of the parent company.?
?Thomas Cook declines to comment on market speculation,? the company spokesperson said in an email response on Tuesday. TCIL?s share ended 0.85% down on Tuesday on the BSE to close at R40.60. At Tuesday?s closing price, Thomas Cook?s 77.1% stake is valued at R663.69 crore out of a market value of R860 crore.
?TCIL would attract buyers as it is one of the more successful travel companies in India,? a consultant with a global audit and consultancy firm said. He cannot be quoted as his firm does business with some travel companies. ?Kuoni already has two travel brands in its portfolio, so I doubt they would want to add a third. But Chinese firm HNA Group could consider a bid as it has been seeking an entry into the Indian aviation and travel market.?
Globally, Thomas Cook Group has been struggling with its travel business. ?The group?s results have been affected by a disappointing performance in the UK and the impact caused by the disruptions in the West Asia and North Africa region, particularly on our French business,? Frank Meysman, chairman of Thomas Cook Group, said in his letter to shareholders in the company?s latest annual report.
The company has a heavy debt of ?900 million and reported a quarterly loss of ?398 million in September.