Cox & Kings tanks 40% in a week on ratings downgrade, payments default

Shares of Cox & Kings were locked in the 10 per cent lower circuit for the third straight day on Friday to quote at Rs 36 apiece on the BSE after the company defaulted on commercial paper worth Rs 150 crore.

There were pending sell orders for 5.16 million shares representing 3 per cent of total equity capital of Cox & Kings on the NSE and BSE, the exchange data show.

Cox & Kings, which runs the tours and hotels business in India and abroad, was trading at an all-time low, plummeting 40 per cent in past one week. In comparison, the benchmark S&P BSE Sensex was up 0.07 per cent during the week.

"About Rs 200 crore was due for repayment to two investors holding the company’s unsecured commercial paper. Of the aggregate amount,  Rs 150 crore has not been paid,” the company said in a regulatory filing on Wednesday. Commercial papers are short-term debt instruments.

According to the management, the company plans to clear all its debt obligations, arising due to cash flow mismatch and a rating downgrade, through a combination of internal accruals and monetisation of assets. 

On Wednesday, rating agency Brickwork Ratings downgraded the company’s Rs 50-crore non-convertible debentures, while retaining its commercial paper rating. On June 11, CARE Ratings had downgraded its rating.

On a month-on-month basis, the stock is down 61 per cent, against a marginal 0.09 per cent decline in the benchmark index.