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Thomas Cook has obtained board approval to divest a 5.42 per cent stake in its subsidiary Quess Corp, which would bring down its shareholding to 51.56 per cent.
It is thereby proposing to raise over ₹600 crore through an offer-for-sale (OFS) as prescribed by SEBI. The floor price of ₹800 a share for this price discovery process, is the same as that of the August 2017 instituitional placement programme (IP) of Quess Corp.
This is in keeping with SEBI regulations that require promoters to bring down their stake to 75 per cent. Post dilution, the promoter shareholding in Quess Corp (of Thomas Cook India and Ajit Isaac, CMD & CEO, Quess Corp) would be at 75.38 per cent.
Fairfax Financial Holdings, through the Thomas Cook India Group, would be maintaining a controlling stake in Quess Corp.
The initiative is also aimed at retiring Thomas Cook India’s long-term debt, thus bringing down the company’s financial costs and improving profitability and liquidity at both standalone and group levels.
Recently, business services provider Quess Corp acquired Tata Business Support Services for ₹153 crore, whereby it would own 51 per cent stake in the Hyderabad-based company with Tata Sons holding the balance stake.
In a statement, Madhavan Menon, CMD, Thomas Cook India Group, said, “At the Thomas Cook India Group, we are committed to holding a controlling stake in our subsidiary Quess Corp. Our proposed dilution of a portion of our stake in Quess Corp is hence intended to comply with SEBI regulations.
“Our aim is to retire our long-term debt and improve profitability; simultaneously increase our cash reserves, enabling us to effectively leverage opportune investments as and when they arise.”
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