Cox & Kings sells 11.58% stake in education and hotels arm for Rs 4.5 bn

Cox & Kings
Cox & Kings sold 11.58 per cent stake in its education tours and hybrid-hotel business in Europe to  global fund SSG Capital Management for Rs 4.5 billion. The tour operator will use the entire proceeds to retire the company debt. As of last December, the company had gross debt of over Rs 40 billion.

Post sale, Cox & Kings will hold 54 per cent stake in the business and the deal values the company's equity holding at $353 million.

In 2011, Cox & Kings acquired UK-based firm Holidaybreaks, a specialist in education tours, in a Rs 23-billion deal. The firm was acquired through a subsidiary company and was funded through equity and debt. A year later, Cox & Kings sold 34.4 per cent of its stake in the firm, bringing down it's ownership to 65.6 per cent.  

On Thursday, the tour operator notified the stock exchange regarding the stake sale in subsidiary Prometheon Holdings UK Limited. The education tours and hotels business, which contributes 47 per cent to its consolidated topline, is held through this subsidiary.

“We had earlier communicated that we are exploring all ways to unlock value in our businesses. The forex demerger was the first step. This deal, we believe, is the second step. We will continue to evaluate all options to monetize wherever possible to create value for our shareholders. We are exploring all options but we don’t have anything specific to discuss at this point of time,” Cox & Kings group CEO Peter Kerkar said in a statement.

“We consider SSG as a strong partner and look forward to leveraging their position and working together to enhance value of education and hybrid hotels business,” he added. 

Last November, Kerkar had said the company was exploring an IPO for its education tour business as it would generate better value for shareholders. Kerkar said he hoped to complete the IPO in 18 months and added that no decision had been taken.