Cox and Kings share has immensely reduced investor wealth in last one year. The small cap stock which closed at Rs 196.05 on August 27, 2018 fell to its all-time low of Rs 4.64 on BSE today.
An investment of Rs 1 lakh in Cox & Kings stock on August 27, 2018 would have decreased to Rs 2,366 today. Cox & Kings share has lost 61.65% in the last 19 days. It hit an all-time low of Rs 4.65 on BSE today. Cox & Kings share price has lost 97.88% during the last one year and fallen 97.21% since the beginning of this year.
Downgrade in rating
The travel firm has been in news recently for default on payment toward maturity of commercial papers due to cash flow mismatch and a situation exacerbated by rating downgrade.
On June 17 this year, CARE Ratings downgraded ratings of Cox and Kings. The credit ratings agency said, "The rating strengths are tempered by exposure of the company's travel business to macro-economic factors prevailing in the markets to which it caters and the fragmented nature of the domestic travel industry. The timeliness, adequacy of the asset monetisation and the subsequent reduction in debt remains the key rating monitorable".
CARE Ratings also took into account high level of pledged shares by promoters and reduced financial flexibility. On June 26, Brickwork Ratings downgraded the rating of the company's NCDs of Rs 50 crore from BWR AA to BWR AA- with stable outlook.
Series of defaults
The travel firm has been hit by a series of defaults on payment toward maturity of commercial papers. It defaulted on its repayment obligations four times in three weeks till July 17.
The first instance of default on commercial papers (CPs) worth Rs 150 crore occurred on June 27. The second default was on CPs worth Rs 50 crore on June 28.
The company again defaulted on July 15 in paying interest of more than Rs 41 lakh on secured redeemable non-convertible bonds (NCDs) worth Rs 50 crore. The company further defaulted on unsecured commercial papers worth Rs 45 crore on July 16.
Uncertainty over Q1 earnings
The company which is battling liquidity issues is yet to announce its earnings for quarter ended June in the current fiscal. In a statement, the travel firm said, "The company is in the process of submitting its draft resolution plan to the lenders. It is also working on various other monetisation initiatives to address its liquidity issues.
The company is not in a position to finalise and consider the financial results on the standalone and consolidated basis along with limited review report of the company and its subsidiaries for the quarter ended June 30, 2019.
It intends to extend the date of submission of the quarterly financial results for the quarter ended June 30 with the stock exchange. The revised date of the meeting to consider the said quarterly financial results shall be communicated at the earliest possible."
Cox & Kings is a diversified, multinational enterprise focused on the travel sector. The company's principal products/services include tours and travels. The company operates in approximately 25 countries across four business verticals.
Edited by Aseem Thapliyal