ETW STAFF – Mumbai
Thomas Cook Group Plc has announced that following an auction process, agreement has been reached to sell its 77 per cent interest in Thomas Cook India (TCIL) to Fairbridge Capital (Mauritius), a subsidairy of Fairfax Financial Holdings. Under the terms of the agreement, Thomas Cook will receive gross cash proceeds of Rs 8,174 million for its shareholding. The agreed price is equivalent to Rs 50 per share, which represents a premium of 11 per cent to the market price immediately prior to the announcement of the auction process. The Group will grant Fairbridge a licence over the Thomas Cook brand for 12.5 years in the countries in which TCIL currently operates.
The disposal is part of the Group’s previously announced plans to reduce debt and strengthen its financial position, which combined with the proposed sale and leaseback of certain aircraft and sale of HVC will also deliver substantial additional liquidity. The net proceeds of the sale will be used to reduce the net debt of the Group.
Completion of the sale will be conditional upon the approval of the transaction by Thomas Cook shareholders and will require Indian regulatory approval. A circular will be sent to shareholders in due course containing further details of the sale together with a notice convening a meeting of shareholders. The sale of TCIL is expected to complete within the current financial year.
Sam Weihagen, group chief executive, Thomas Cook said, “I am pleased to be able to announce this disposal, which is a further step in improving the Group’s financial position and demonstrates our on-going commitment to reducing debt and strengthening the balance sheet. I would like to thank the TCIL management team for their professionalism they have shown through this process. We wish them well under their new ownership.”