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In a bid to reduce its debt further, Cox & Kings has raised ₹450 crore by selling 11.58 per cent stake in its subsidiary, Promotheon Holdings UK (PHUK), to PE firm, SSG Capital Management. The education and hybrid hotels business of Cox & Kings is under PHUK, which is a subsidiary of Promotheon Enterprises (PEL).
Post the stake sale, Cox & Kings will hold 54 per cent of PHUK through PEL, while SSG Capital will hold 46 per cent.
In November 2017, SSG Capital had bought The Rohatyn Group’s (TRG) entire stake of 34.42 per cent in PHUK, which has now been increased by 11.58 per cent.
Speaking to BusinessLine , Peter Kerkar, Group CEO, Cox & Kings, said, “The divestment of stake is in our subsidiary company, which should see an inflow of ₹450 crore to the Indian company. This would help in reducing our debt further which currently stands at ₹4,100 crore.’’
The latest deal values PHUK at $653 million, up from $615 million in November 2017.
However Cox & Kings does not intend to bring its education or hybrid hotels businesses to India.
“We are mindful of our return on equity and capital employed. If we see an opportunity which gives bigger bang for the buck, we would look at Europe or America or Australia. But if the same return can be derived in India, we may look at it but the cost of land continues to be high in the country.’’
Cox &Kings’ education vertical has experiential and outdoor learning brands like PGL and NST, among others. Its hybrid hotels operates under the Meininger brand with 20 hotels across 12 European cities.
NBFC plans
Meanwhile, the travel company is getting ready to start a NBFC, having demerged its foreign exchange business in May last year.
“We have announced the demerger and are waiting to get the NBFC licence from the RBI. The court proceedings are still on for the demerger,” added Kerkar.
Shares of Cox & Kings were down 0.93 per cent and closed at ₹240.85 on the BSE on Thursday.
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