Less than a month after Thomas Cook (India) Ltd (TCIL) had asserted that the pledging by its UK parent of its 77.11 per cent holding in its Indian subsidiary “would have no impact on our business’’ and it continues to operate as usual, Thomas Cook Group plc has announced that it is launching a formal sale process to divest its shareholding in the Indian subsidiary.
The UK parent said the decision stemmed from the “unsolicited informal expressions of interest from the third parties to acquire its stake in TCIL’’. But it clarified that the sale would happen only if it gets the right price.
The announcement sent the stock to hit the upper limits in both the exchanges, freezing trading in the counter.
The stock hit the upper circuit both on the BSE and NSE with only buyers and no sellers. On the BSE, trading in the stock was frozen at Rs 53.90, an increase of Rs 8.95 or 19.9 per cent with a trading volume of 23.44 lakhs. There were buyers for 8.86 lakh shares.
On the NSE, the stock hit the upper limit of Rs 53.85, a jump of Rs 8.95 or 19.93 per cent with a trading volume of 37.57 lakh shares. There were buyers in the queue to purchase 5.95 lakh shares.
In a communication to the stock exchanges, Thomas Cook India made public its parent’s release in which the latter said that it was launching a “formal sale process for its 77.1 per cent shareholding in TCIL’’.
The release quoted Mr Sam Weihagen, CEO of Thomas Cook, as saying that “if the offers are attractive then we will consider selling our stake and use the proceeds to continue to strengthen the group’s balance sheet’’.
He further asserted that “TCIL is a strong business operating in an attractive market. Both the business and the market are growing and Thomas Cook will only sell its stake if a compelling offer is received.’’
There have been persistent market rumours that Thomas Cook had put TCIL on the block, particularly after the UK company created a pledge on the securities held by it in TCIL.
The Indian company, in a release issued on January 12, 2012, stated that TCIL “is completely independent of the parent’’. It was a standalone entity and has no financial inter-dependencies with Thomas Cook Group plc which was only a shareholder in TCIL.
Mr Madhavan Menon, Managing Director, TCIL, had then stated that the creation of a pledge by Thomas Cook Group plc “is a standard requirement in procurement of its enhanced financial facilities’’.
The statement of Thomas Cook Group plc “has no impact on TCIL’s financial position or operational performance’’ and the development would have “no impact on our business, people, customers, suppliers and the services we provide’’.
“We continue to operate business as usual,’’ he had added.