Sterling Holiday Resorts becomes subsidiary of Thomas Cook

Development comes on the back of an increase in stake by Thomas Cook

Sterling Holiday Resorts India Ltd became a subsidiary of Thomas Cook India Group in the back of the former's equity shares being bought in an off-market transaction by Thomas Cook Insurance Services (TCISIL).

According to the company's announcement, on September 3 and September 5 Thomas Cook Insurance Services purchased 11,863,334 paid-up equity shares of Sterling Holiday Resorts at Rs 98 a share in an off-market transaction. Following the transaction TCISIL now holds 53.48%.

TCISIL, is a wholly owned subsidiary of Thomas Cook (India) Ltd. TCIL's another subsidiary Travel Corporation (India) Ltd owns around 1.67% in SHRIL. The Thomas Cook India group now holds around 55.14% in SHRIL.

Early this year, Thomas Cook India has bought Chennai-based Sterling Holiday Resorts and announced a merger in a cash and stock deal that values Sterling at Rs 870 crore. Both companies jointly will have a market value of Rs 3,000 crore, with 9,000 employees.

Sterling Holiday went through trying times with high debt till Bay Capital took it over in 2009. Bay Capital Investment's Siddharth Mehta took over as chairman of Sterling Holiday and brought in Ramanathan from Mahindra Holiday Resorts to run the company.

Since then, the company has been making a return of sorts by refurbishing its resorts. It has increased occupancy levels to 52% from a low of 16% witnessed a few years back. The company has 70,000 members and gets half of its business from non-member customers.

The second round of investment came in 2011 when stock investor Rakesh Jhunjhunwala and Radhakrishnan Damani each took seven per cent stake. The two rounds of equity infusion helped the company repay debt and renovate existing properties.