Thomas Cook plans to sell its Indian arm
Thomas Cook has initiated a process to sell its 77% stake in Thomas Cook India, a transaction intended to bring down its debt up to GBP890 million ($1.4 billion). Several Private equity investors are said to be potential suitors.
Thomas Cook, the second-largest holiday maker in Europe, has been warned of a possible debt default in the UK, its home market. The company has asked lenders to come to its rescue twice in five weeks. Thomas Cook's Indian arm, meanwhile, with a turnover of INR 3.1 billion($62 million), is one of the most profitable units within the group. Credit Suisse is assisting in the sale, according to The Times Of India.
Private equity players including KKR, The Blackstone Group, Actis and Bain Capital are said to be potential investors in Thomas Cook India. Cox & Kings, one of the world longest established travel company, is also interested in purchasing the asset. However, given its recent acquisition of Holidaybreak, another UK company, Cox & Kings is seen as an unlikely bidder.
Thomas Cook's CEO Sam Weihagen said in a regulatory filing: "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."
In 2005, Thomas Cook sold the Indian arm to Dubai Investment Group, yet bought it back in 2008. It would be its second such exit. Shares in the company rose 20% on Wednesday after the announcement of the potential sale.
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