Thomas Cook slips after board withdraws buyback

Thomas Cook (India) fell 3.03% to Rs 28.85 after the company said its board has withdrawn the proposal of share buyback due to Covid-19.

The company on 26 February 2020 had approved the proposal to buyback of 2.60 crore equity shares (6.90% equity) at Rs 57.50 each for a maximum aggregate amount of Rs 150 crore.

"The board was of the view that the purpose of the buyback was to create a mechanism for distributing surplus cash to our shareholders and enhance shareholder value, but considering the fact that the present commercial and financial position of the company has undergone substantial deterioration on account of the impact of the COVID-19 pandemic and the extended global lockdown measures, it is critical and in the best interests of all our shareholders and investors to protect the financial sustainability of the company," Thomas Cook said in a statement.

The company will proceed to apply to SEBI, and other applicable authorities, for such withdrawal, in accordance with applicable law.

Thomas Cook (India) provides travel and travel related financial services which include foreign exchange, corporate travel, insurance, visa and passport services, gift cards, hotel bookings, flight ticket bookings, tour packages and electronic business.

The company reported a consolidated net loss of Rs 94.21 crore in Q1 FY21 as compared to a net profit of Rs 16.75 crore in Q1 FY20. Net sales during the quarter slumped 96.3% YoY to Rs 85.03 crore.

On a year-to-date (YTD) basis, the stock has tumbled 54.82% while the benchmark S&P BSE Sensex has lost 8.59% during the same period.

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