Thomas Cook
India is next asset sale
Thomas Cook is seeking a buyer for its Indian subsidiary which is to be sold to reduce debts.
Foto: fvw/Christiane von Pilar
The UK group has decided to quit the Indian market two years after increasing its stake in Thomas Cook India Ltd (TCIL) to 77% as part of expansion activities in emerging markets. Proceeds from the sale, which follows the disposal of several hotels in Spain and travel agencies in the Netherlands, will be used to reduce the group’s heavy debts.
Cook said it has received unsolicited approaches for its stake in TCIL and had decided to formally put it up for sale. CEO Sam Weihagen said: “If the offers are attractive then we will consider selling our stake and using the proceeds to continue to strengthen the Group’s balance sheet. TCIL is a strong business operating in an attractive market. Both the business and the market are growing and Thomas Cook will only sell its stake if a compelling offer is received.”
TCIL, which is primarily a foreign exchange company but is expanding its tour operating business, operates in 70 Indian cities with 153 outlets and also sells through 110 Gold Circle Partners and 184 Preferred Sales Agents in over 100 cities throughout India. It also has overseas operations in Mauritius and Sri Lanka.
Thomas Cook could follow up with other asset sales, according to CFO Paul Hollingworth. He named property and minority stakes such as in Disneyland Paris as examples of possible disposals.
The sale was announced along with the results for the October – December 2011 first quarter of the 2011-12 fiscal year. As widely expected, the company made a heavy loss of £91 million, compared to the previous year’s £31 million, while revenues rose 3% to £1.9 billion.
In the UK, bookings for summer 2012 are flat, with a 9% drop in packages offset by an 18% rise in specialist & independent bookings. Cook confirmed it will take six planes out of the fleet and has already closed 22 of 115 retail outlets that are scheduled to shut.
In Central Europe, summer bookings are down 1% with prices up 1% and capacity 5% lower. Bookings in West & East Europe have slumped 10% due to low demand for North Africa, while Northern Europe has started with a 19% drop.
Weihagen said that 2011-12 would be “a challenging year” with general trends expected to continue, although summer trading was “more encouraging”. There is still no sign of a new CEO, however.
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