Cox & Kings cuts debt with Rs 1k-cr QIP issue

Tour operator Cox & Kings has cut its debt and halved its interest outgo through a mix of asset sale, refinancing of loans and Rs 1,000 crore capital raising through qualified institutional placement (QIP) route.

The tour operator's net debt will reduce to Rs 2400 crore from Rs 4200 crore in March following these measures.

Cox & Kings had acquired UK travel firm Holidaybreak in 2011 for about Rs 2,300 crore and the deal was funded with dollar debt valued around Rs 1,500 crore.

On Wednesday the company announced the closure of QIP transaction. Housing Development Finance Corporation, HSBC and Janus Capital Group subscribed to the QIP issue and allotted shares valued Rs 305 per share including premium amount.

In June the company sold Holidaybreak's camping business to a French company and that was followed by refinancing of Holidaybreak's existing debt lowering interest rate and providing for easier repayment terms.

"The important objective for us was to strengthen the balance sheet. By the end of this financial year our annual interest cost will reduce to about Rs 175 crore from about Rs 325-340 crore now," said Chief Financial Officer Anil Khandelwal.

"In the first half of the current year we have experienced growth of 17 per cent in our India leisure business and we hope to better the growth. Our international education and and Meininger (hotel) business is a resilient business and showing growth," he added.