Comments
Tata Capital, the financial arm of the Tata Group, is the latest contender in the race for a buyout of Thomas Cook India, sources indicated.
Private equity investors Kohlberg Kravis Roberts (KKR), Carlyle, and Travelex are among the known bidders. When contacted, Tata Capital declined to comment on the issue.
Thomas Cook Group PLC is in the process of selling its 77.1 per cent shareholding in Thomas Cook (India) Ltd (TCIL). The tourism business coupled with strong inflows from forex trade, make TCIL a good buy, say analysts. Many private equity players have been showing interest in the tourism industry in recent times.
“Thomas Cook has been garnering interest from several private equity players. Private equity investors always look at investing in a good business which is stable. In such investments, the lock-in period is about 3 to 5 years. Exits are typically through a strategic sale or through a listing. A successful exit in this sector should give an average return of 20 per cent,” said Mr Avinash Gupta, Leader, Financial Advisory, Deloitte.
The contending investors declined to comment on the issue.
Thomas Cook (India), which began operations in 1881, is the largest local travel firm with a huge business in forex. It operates in 70 Indian cities across 153 locations. Its forex business accounts for 60 per cent of its consolidated revenue.
At a media conference held recently, Mr Madhavan Menon, Managing Director of Thomas Cook (India) Ltd said that the India unit would not be broken down and sold.
“The parent company has faced issues regarding profitability. As a part of the process, they needed to restructure the group. Thomas Cook India is regarded as a major player in the industry and it is not a distress sale,” Mr Menon added.
The buyers could retain the brand “Thomas Cook” for a period of seven years.
Thomas Cook (India) Ltd had posted a net profit of Rs 55.91 crore for the year ended December 31, 2011, an increase of 34.6 per cent from Rs 41.53 crore in the previous year.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.