With UK travel giant Thomas Cook Plc declaring bankruptcy, Thomas Cook (India) Ltd, a BSE - listed company reiterated that it had no relation to the UK entity hence it had no impact. Speaking to Business Today, Madhavan Menon, chairman and managing director said while the company has the right to use the brand name 'Thomas Cook ' till 2024, it could review the same in coming days. "As per the original agreement we lose use of the brand name at the end of 2024. We have a detailed transition plan in place, which is ready for execution" he said.
According to the company's transition timeline, the plan would have been put in motion starting next year. The agreement signed by in 2012 protects the rights of Thomas Cook (India) to use the brand name till end-2024 and potential to access other brands going forward. With the crisis at the UK entity likely to worsen, "It's important to wait and see how this pans out. We will do a detailed review over the next couple of weeks and decide what we want to do", added Menon.
Thomas Cook (India) Ltd was acquired by Fairfax Financial Holdings after a 77% stake sale in 2012 by Thomas Cook UK. Post transfer of its entire stake in Thomas Cook (India) Limited to Fairfax, Thomas Cook UK ceased to be the promoter of Thomas Cook (India) Ltd and has had no financial or business stake. Currently Fairbridge Capital (Mauritius) Limited - a Fairfax company owns nearly 67 per cent stake in the company while the rest is held by the public.
Thomas Cook (India) currently has cash and cash deposits of nearly Rs. 1,389 crore as of June 30, 2019. On a standalone basis the company was debt free upon pre-payment of Rs. 67 crore debenture obligations ahead of schedule. The group generates average annual free cash flow of around Rs. 250 crore. Menon said currently there is no need for cash infusion. "We don't have anything to buy and will focus towards generating cash". The company is likely to benefit from the recent reduction of tax rates and other reforms announced by the Finance Minister.
The 178-year-old, UK- headquartered Thomas Cook had been seeking $250 million from private investors to save it from collapse. "Despite considerable efforts, those discussions have not resulted in agreement between company's stakeholders and proposed new money providers," Thomas Cook said in a statement. However the company's board concluded that there was no other option but to proceed towards compulsory liquidation with immediate effect. Following the collapse of the travel company, the UK government hired planes to fly an estimated 150,000 holidaymakers back home free of charge.