Cox & Kings sells majority stake in UK portals

The tour operator has sold majority stake in LateRooms & Superbreak

Tour operator Cox & Kings has sold majority stake in LateRooms and Superbreak, its two UK-based hotel booking and leisure travel portals, to a private equity investor, raising £23 million (Rs 210 crore). The sale proceeds would be used to retire debt.

Last year, Cox & Kings acquired hotel booking site — LateRooms — to expand its online leisure business. Superbreak is a part of leisure travel firm Holidaybreak, which Cox & Kings acquired in 2011.

On Monday, Cox & Kings announced it had sold the entire stake in these two companies to Malvern Enterprises, in which it holds 49 per cent. The remainder in Malvern Enterprises is held by a private equity investor.

The tour operator did not name the co-investor. Chief Financial Officer Anil Khandelwal said the company decided to bring in an investor as it would be easier to raise funds for scaling up the online business.

The company’s 49 per cent equity stake in Malvern will be accounted for as an investment in an associate company. The goodwill write-off on sale of Superbreak was £71.4 million, it said.

Cox & Kings had consolidated debt of Rs 2,950 crore as of December-end and aims to reduce it by about Rs 400 crore by the year-end.

Over the past couple of years, the tour operator has been reducing its debt through asset sale and fundraising initiatives. It raised Rs 1,000-crore Qualified Institutional Placement issue which was used to cut debt in November 2014.

In the same year, 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.