BackCox and Kings sells UK’s adventure holidays unit to Hotelplan (UK Group)
Travel firm sells Explore Worldwide to UK tour operator Hotelplan as it aims to focus on core businesses
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Cox and Kings Ltd, one of the oldest travel agents in India, on Tuesday announced the sale of Explore Worldwide Ltd, its UK adventure holidays unit.
The firm told stock exchanges that it sold Explore Worldwide, a unit of its subsidiary Holidaybreak Plc, to Hotelplan (UK Group) Ltd, a specialist UK tour operator, for £25.8 million.
Explore Worldwide, which includes the brands Explore (soft adventure tours) and RegalDive (diving adventures), generated net revenue of £11.2 million and operating profit of £2.3 million in fiscal 2015.
Explaining the rationale of the sale, Peter Kerkar, director, Cox and Kings, said: “The sale of this business helps us to further increase focus on our three key verticals—leisure, education and hybrid hotels (Meininger).’’
Meininger is also a subsidiary of Holidaybreak, and provides the service and comfort of an international budget hotel with a combination of regular and multi-bedded rooms, guest kitchens and game zones.
The bedrooms of Meininger range from traditional double rooms to rooms with multiple beds and dormitories and are tailored and adapted to the particular target market the hotel is catering to in a specific location. It currently operates 16 hotels in Europe, with a total of 7,025 beds in 10 European cities.
In September 2011, Cox and Kings, through its UK unit Prometheon Holdings (UK) Ltd, had acquired the European education and leisure Holidaybreak for £312 million in an all-cash transaction, marking the biggest overseas acquisition by an Indian travel company and the ninth acquisition by Cox and Kings.
Holidaybreak is a UK-listed specialist travel company operating in education and activity travel groups. It has operations in the UK, Germany, Switzerland, Austria, Belgium, the Netherlands and Ireland.
Proceeds of the sale are likely to be used for retiring debt, according to a senior Cox and Kings executive, who requested anonymity. The total debt of the firm stood at ₹ 3,622.03 crore as on 30 September 2015.
“We have always maintained that we will reduce our debt by ₹ 400 crore to ₹ 500 crore this fiscal," said Anil Khandelwal, chief financial officer at Cox & Kings.
Shares of the company have fallen 15.17% in 2015 to ₹ 250.45, while the benchmark Sensex has dropped 4.84%. Rival Thomas Cook (India) Ltd’s shares have risen 27.45% during that period.
This is not first time Cox and Kings has sold a part of Holidaybreak’s business.
In June 2014, Cox and Kings sold Holidaybreak’s camping division to France’s Homair Vacances for £89.2 million. Cox and Kings got £85.5 million in cash on completion of the deal and an additional £3.7 million in the form of a deferred payment and relates to a tax refund. The proceeds were used to cut debt.
The firm is selling businesses that have no synergy with its existing businesses.
Cox and Kings is one of the longest established travel companies in the world since 1758. Headquartered in India, it is a leading holidays and education travel group with operations in 22 countries across four continents. In India, it has a presence in 149 cities.
In a note on Tuesday, Kashyap Pujara, executive director, midcaps, institutional equity research, at Axis Capital Ltd, said the firm’s brokerage unit believes Explore’s disposal is in line with Cox and Kings’ strategy to exit from non-core operations and focus on key businesses.
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