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Thomas Cook sees 96mn pounds goodwill charge on India biz sale

Press Trust of India  |  London 

Announcing the earnings for half year ended March 2012, Thomas Cook said sale of India business for Rs 817 crore (about 94 million pounds) along with other initiatives would help in building a stronger financial platform for the group.

"On May 21, 2012, the group announced that it had agreed to sell its interest for Rs 817.4 crore.

"Consequently, an impairment charge of 96 million pounds has been recognised against goodwill on writing down the net assets of the Indian subsidiary to fair value less costs to sell," Thomas Cook Plc said in a statement.

Goodwill impairment charge is a notional figure.

Thomas Cook saw its underlying loss before tax widen to 328 million pounds for the six months ended March 2012.

In the year-ago period, the same stood at 232 million pounds.

The loss before tax excludes "exceptional operating items, IAS 39 fair value re-measurement, goodwill impairment and BCI amortisation".

The group's revenues in the half-year ended March climbed to 3.517 billion pounds from 3.431 billion pounds in the same period a year ago.

Thomas Cook has agreed to sell its 77 per cent interest in Thomas Cook India Ltd to Fairbridge Capital (Mauritius) Ltd, a subsidiary of Fairfax Financial Holdings Ltd.

"Completion of the sale is conditional upon shareholder approval and will require Indian regulatory approval. The sale is expected to complete within the current financial year," it said.

Thomas Cook has also recognised charges of 109.2 million pounds with respect to North American business and another 94.4 million pounds related to West European operations.

"Poor trading and subsequent reviews undertaken by new management in Canada and France have indicated that the goodwill carried in the North America and West Europe segments may be impaired," the statement said.

Commenting on debt-reduction initiatives being taken by the company, Chief Executive Sam Weihagen said it has been a period of significant change for the group.

Thomas Cook has also entered into an agreement with its banking group for longer term and more flexible funding.

"This, combined with the sale of Thomas Cook India, the sale and leaseback of some of our aircraft and the disposal of other non-core assets, provides the group with a much stronger financial platform," he noted.

At the end of March 2012, the group's total debt stood at about 1.4 billion pounds.

First Published: Thu, May 31 2012. 22:55 IST