Cox & Kings-owned booking website and travel firm in the UK have shut down leaving hundreds of customers in a lurch. The tour operator has been facing a cash crunch leading to loan defaults and this has triggered the closure of its two business units in UK.
According to UK media reports, booking website LateRooms and holiday firm Superbreak ceased operations on Thursday after their parent, Malvern Group, declared insolvency. Cox & Kings, which owns 49 per cent stake in the Malvern Group, did not comment on the development. However, it informed the exchange about the payment default on Rs 100 crore commercial paper.
The UK firm had appointed KPMG to conduct a strategic review and find an investor. It said loan defaults by Cox & King resulted in withdrawal of funding for the Malvern Group and eventual closure of its business units.
On Friday, Tracey Pye and David Costley-Wood from KPMG were appointed as joint administrators to the travel firms. The administrators will work closely with Association of British Travel Agents and UK Civil Aviation Authority to minimise disruptions and will seek offers from suitors.
"The directors of Malvern Group embarked upon an accelerated sales process to bring further investment into the business. However, with the cash position of the company deteriorating rapidly, this process was unfortunately unsuccessful, prompting the directors to take the difficult decision to appoint the administrators," said Tracey Pye, joint administrator.
"Coming in the midst of the summer holidays, we understand this news will be of grave concern to 23,000 LateRooms.com and 19,000 Super Break customers who have future bookings with the group," he added.