Thomas Cook to sell stake in Indian unit

Thomas Cook Group Plc today said that it has decided to sell its majority stake in Thomas Cook India Ltd, a deal which may fetch the debt-ridden travel services provider around Rs880 crore ($180 million).

The announcement sent Thomas Cook (India) stock rising by nearly 20 per cent to Rs53.90 per share in the afternoon trading at the Bombay Stock Exchange (BSE), valuing Thomas Cook's 77.13 per cent stake at around Rs886 crore.

Quoting Thomas Cook CEO, Sam Weihagen, Thomas Cook India said in a filing with the BSE, ''Following a number of unsolicited informal expressions of interest, we have decided to seek formal offers for our stake in Thomas Cook India."

Manny Fontenla-Novoa, who had led Thomas Cook since 2007, resigned in August 2011 after three profit warnings in a year amid weak demand for travel triggered an 80 per cent decline in its share price.

Thomas Cook Group plc, Europe's largest tour operator and UK's second-largest foreign exchange group, blamed the nearly £400-million loss in the first six months of 2011 to the floods in Thailand and the uprisings in Egypt and Tunisia.

The firm, which is estimated to have net debt of 900 million, arranged a £200-million revolving credit facility from banks and is hoping to raise another £200 million by selling non-core assets such as hotels and its stake in UK's air traffic control service.