Thomas Cook India denies stake sale reports

Thomas Cook Thomas Cook India (TCIL) yesterday denied earlier media reports that its UK parent would sell its entire stake in its Indian arm although it did confirm pledging of the stake with Royal Bank of Scotland (RBS).

Media reports last week said that the London-based embattled travel agency, which has a market capitalisation of approximately $6 billion, has pledged its 77.11 per cent stake in TCIL with RBS, and the Scottish lender has been engaged to find a buyer for the Indian unit.

The reports also opined that likely buyers could be Mumbai-based Mercury Travels, Cox & Kings, Chinese firm HNA and London-based foreign exchange group Travelex.
A company spokesperson for TCIL said, ''Thomas Cook India will not comment on any market speculation.''

However, TCIL did admit that its parent had indeed pledged its stake with RBS for £200 million, but said it was a routine transaction to enhance its financial facilities.
Thomas Cook Group had pledged the securities held by the promoters, TCIM Ltd and Thomas Cook UK Ltd in Thomas Cook (India) Ltd of their total shareholding of 163471449 shares, representing 77.11 per cent of the issued share capital.

Madhavan Menon, managing director for TCIL said in a statement, ''The creation of a pledge by Thomas Cook Group Plc is a standard requirement in procurement of its enhanced financial facilities. In fact, TCIL has been reaffirmed with a rating of A1+ for short-term borrowings and AA- for its long-term debt by Crisil. This is a clear indication of our strong and viable commercial standing. I would like to re-iterate that the statement issued by Thomas Cook Group Plc has no impact on TCIL's financial position or operational performance.''

Menon also said that TCIL was financially independent from the parent company and Thomas Cook Group's debt or operational performance had no bearing on the Indian unit.