Cox and Kings shares were locked in the lower circuit band of 5% on Thursday after media reports suggested that the troubled tour operator cancelled European group tours at the last minute because of the financial crisis and put hundreds of its staff on notice at its Mumbai-headquartered office.
The stock price of Cox and Kings that has lost 97% of its value year-to-date, was locked 5% lower at Rs 3.49 since the opening bell today, against the previous close of Rs 3.67 on the BSE. At the volume size of 5.20 lakh shares, there are 2.61 lakh sellers offering with no buyers bidding on the stock. The stock is trading mere 0.39 points away from its 52-week low of Rs 3.10.
Due to the delay in raising funds, the travel service enterprise has reportedly asked hundreds of its staff to leave, sparking protests at its Mumbai office. Further media reports suggested that Cox & Kings Ltd. has not been paying salaries to around 2000 of its employees for the last 3 months.
The troubled tour-operator's spokesperson admitted that the company was not able to meet its commitment due to cash crunch and told TNN that," we have stopped accepting bookings for a month now." The spokesperson further said that the company would refund the money within three months.
Another report suggested that Cox and Kings cancelled European group tours as the IATA revoked its license, constraining its ability to issue air tickets on credit. The company had marketed group tours in the month of October. Cox and Kings further said that it will be refunding tour costs to the customers.
The firm told Business Standard, that it has been in talks with various financial and strategic investors, although raising funds has taken longer than anticipated time. "We wanted to complete the process in 90 days, but it looks like it will take 180 days," said the touring company.