Fairbridge buys Thomas Cook India for Rs 1,157 cr

This will be followed by an open offer for the remaining stake in TCIL that will entail an outgo of over Rs 340 crore.

In a statement Thomas Cook Plc said: “Under the terms of the agreement,Thomas Cook will receive gross cash proceeds of Rs 8,174 million for its shareholding.”

The agreed price is equivalent to Rs 50 per share,which represents a premium of 11 per cent over the market price immediately before the announcement of the auction process,the statement added.

In a separate filing to BSE,TCIL said Fairbridge Capital has appointed Pioneer Money Management to manage the open offer to acquire the remaining shares of more than 5.2 crore at a price of Rs 65.48 per share.

TCIL’s scrip closed at Rs 62.65 per share,up 2.37 per cent from the previous close on the BSE.

Further details of the offer shall be published by May 28,2012,it added.

Providing details of the acquisition,Thomas Cook Plc Group said it will grant Fairbridge a license over the Thomas Cook brand for 12.5 years in the countries in which TCIL currently operates,it said.

Thomas Cook Plc Group Chief Executive Sam Weihagen said: “I am pleased to be able to announce this disposal,which is a further step in improving the group’s financial position and demonstrates our on-going commitment to reducing debt and strengthening the balance sheet.”

The stake sale in the Indian arm is part of the Group’s previously announced plans to reduce debt and strengthen its financial position,which combined with the proposed sale and leaseback of certain aircraft,among others to get substantial additional liquidity.

“The net proceeds of the sale will be used to reduce the net debt of the Group. Completion of the sale will be conditional upon the approval of the transaction by Thomas Cook shareholders and will require Indian regulatory approval,” the company said.

Thomas Cook India Ltd (TCIL) had gross assets of Rs 932.7 crore and net assets of Rs 392.3 crore as on December 31,2011 and generated net profit of Rs 56.24 crore for the 12 months ending December 31,2011,it added.

The current TCIL management team will remain with TCIL upon its sale. The sale of TCIL is expected to complete within the current financial year,the company said.

Fairfax Financial Holdings Ltd is a financial services holding company based in Canada.