Indian branch of the Thomas Cook Group is not just afloat but is thriving with expected double-digit revenue growth in the current financial year. Thomas Cook (India) Ltd shares tumbled 12% to hit Rs 135.05 after concerns surrounding Thomas Cook UK.
While one of the world’s oldest travel and leisure companies Thomas Cook UK filed for compulsory liquidation on Monday, the Indian branch of the group is not just afloat but is thriving with expected double-digit revenue growth in the current financial year. Despite the ongoing economic slowdown, the travel firm also has forward bookings in the upcoming festive season, Madhavan Menon, Chairman and Managing Director, Thomas Cook India, told CNBC TV-18 in an interview. Further, as the GST panel lowered the tax slab on room tariffs last Friday, the same is expected to help two of Thomas Cook India’s subsidiaries as it is likely to bring more business, he added.
Thomas Cook group announced that the company has ceased operations with immediate effect after it failed to secure a bailout from lenders. However, the Indian branch, which was acquired by Canada-based multinational Fairfax Financial Holdings in 2012, said that it will continue to function. In a statement circulated on Thomas Cook India’s website, the company said that “it is a completely different entity since August 2012.” Since Fairfax acquired 100% stake in Thomas Cook India, Thomas Cook UK is no longer a promoter of the India subsidiary, leaving it unaffected by the original company’s bankruptcy. Thomas Cook (India) Ltd shares remained under pressure on Tuesday, and tumbled 12% to hit the day’s low at Rs 135.05 on BSE.
Thomas Cook UK got defunct on Monday owing to financial turbulence at the company. The 178-years-old company has an estimated debt of 1.7 billion pounds, according to media reports. Further, stiff online competition and the immense heatwave that Europe was hit last summer added to the woes of the travel firm and the company witnessed lower than usual sales.
After the company suspended operations and Thomas Cook flights were cancelled, millions of travellers across the globe were left in a frenzy and were stranded across various locations around the globe. The British government has undertaken one of its largest repatriation measures to bring back about 1.5 lakh holidaymakers.
Announcing the company’s collapse, Peter Fankhauser, CEO, Thomas Cook Group, said: “We have worked exhaustively in the past few days to resolve the outstanding issues on an agreement to secure Thomas Cook’s future for its employees, customers and suppliers. Although a deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge that ultimately proved insurmountable,” Thomas Cook, which was founded in 1841, survived two world-wars before transforming into a behemoth in package holidays and mass tourism.