Financial Daily from THE HINDU group of publications
Wednesday, Sep 08, 2004
Mergers & Acquisitions
UK travel co to pick 50 pc stake in Friends Globe
Chennai , Sept. 6
AN UK-based multinational travel company is investing Rs 100 crore for a 50 per cent stake in the New Delhi-based Friends Globe Travels, according to Mr Rahul Nath, Country Manager and CEO, Friends Globe Travels Ltd.
Mr Nath said that the UK company has a turnover of about $9 billion, but he was not willing to name the company citing various confidentiality clauses. The management control would remain with Friends Globe, he said.
The deal would be struck by the end of this month, he said. An initial public offering is also on cards, sometime later, he added.
Initially, the new company would maintain Friends Globe tag.
Friends Globe is getting into this joint venture because the future market is moving towards multinational companies identifying one travel vendor to manage worldwide travel. Clients also expect seamless service across the borders, he said.
The new company has plans to expand to Sri Lanka and other countries in the Indian sub-continent. The UK company is already present in China and Singapore.
As of now, Mr Nath said that Friends Globe has one of the lowest attrition rates in the industry. This was mainly because of the human resources policies, which have been put in place.
The Rs 360-crore Friends Globe is present in 11 locations, which would go up to 26.
The company started operations in 1987 and has in the last four years a CAGR of 48 per cent, Mr Nath said.
The company has been able to achieve double-digit growth rates mainly because of the high service levels it has been able to maintain, he said. The company has invested Rs 2 crore and this investment is expected to go up to Rs 4 crore, in Enterprise Resource Planning and Customer Relationship Management software that has resulted in shorter turnaround times.
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