The management of Thomas Cook, the UK-based travel and foreign exchange operator, has no plan to sell stake in its Indian arm, the latter clarified.
This came a day after Thomas Cook pledged the entire shareholding in its India unit triggering stake sale talk.
Country managing director Madhavan Menon told Business Standard, "Any business is saleable at the right price", but quickly added that Thomas Cook had no plans to sell "as of now".
He said if the India business was to be put on the block, he would have known.
Thomas Cook has pledged the entire shareholding of 163,471,449 shares in the India unit, representing 77.11 per cent of the issued share capital yesterday for securing finances, the company informed the stock exchanges. The shares were pledged to Royal Bank of Scotland for a £200 million loan.
Menon said pledging shares was a part of the process, which had been going on for several months. At a time when the parent company of Thomas Cook has been reeling under debt, Menon said India would continue to be a major provider of dividend to the company. “There is no financial interdependence on the parent company. We will very soon announce our quarterly results. Our performance has been extraordinary and holiday bookings have gone up significantly,” he said.
Menon also told the Bombay Stock Exchange (BSE) on Thursday that Thomas Cook (India) Ltd has been reaffirmed with a rating of A1+ for short-term borrowings and AA- for its long-term debt by CRISIL. “This is a clear indication of the strong and viable commercial standing of TCIL. I would like to re-iterate the statement issued by Thomas Cook Group Plc has no impact on TCIL’s financial position or operational performance,” he said.
He said pledging shares was a standard requirement in procurement of its enhanced financial facilities and the move had no impact on the financial position or operational performance of the India business.
“The rupee depreciation has resulted in a further positive upside to our foreign exchange business. Our forward bookings are showing strong demand on the holiday side as well,” Menon said in his statement to the BSE. Reserve Bank of India is leading the bank consortium in the pledging of shares.
The company’s functioning in India is a departure from that of UK’s with foreign exchange and outbound travel making up for its core business here. Foreign exchange for the parent company is a non-core business. Last year, the group had announced plans to sell non-core assets worth £200 million in 6 to 18 months to reduce debt. To lower debt , Thomas Cook Group also agreed to carry out a strategic review of its business and announced it would sell its chain of hotels in Spain to raise cash. It had also decided to sell its office property in Netherlands.
