Thomas Cook India Announces Demerger of Resorts Business into SHRL.
“By simplifying the current capital structure and improving Earnings Per Share, this demerger and restructuring unlock tremendous value and potential for TCIL shareholders,” stated Mahesh Iyer, MD & CEO of Thomas Cook India.
The Board of Thomas Cook (India) Limited (TCIL) approved a proposal for the demerger of the company’s resorts and resort management business into Sterling Holiday Resorts Limited (SHRL) and a subsequent capital restructuring of TCIL, based on recommendations from the audit committee and independent committee. NCLT and other regulatory clearances are required for the proposed demerger and restructure.
The purpose of this demerger and restructuring is to attract distinct investor cohorts for each business segment and to unleash value for TCIL’s shareholders by demerging the resorts and resort management business into SHRL; Simplify TCIL’s current capital structure to increase earnings per share; and allow for more agile pursuit of sector-specific growth plans and greater strategic and operational focus across all business verticals.
Under the moniker Nature Trails, TCIL directly owns and/or runs six resorts. These resorts are dispersed around India in a number of picturesque settings and provide a wide range of well chosen services catering to various appealing market niches, such as business retreats, educational excursions, and adventure vacations. As part of the demerger, TCIL will transfer this business to SHRL.
TCIL will demerge its resorts and resort management business into SHRL as part of the proposed demerger and restructuring under a composite scheme of arrangement. In accordance with the share entitlement ratio of 0.81 shares of SHRL for each share of TCIL, TCIL shareholders will receive SHRL shares as compensation for the demerger.
After the demerger, TCIL will keep the shares it currently owns in SHRL. Following the demerger, TCIL and SHRL’s promoters and public shareholding structure will not change. The BSE and NSE will list SHRL shares.
After that, TCIL will combine four shares with a face value of INR 1 each into one share with a face value of INR 4. The face value of TCIL’s shares will drop from INR 4 to INR 3. In order to cut administrative expenses, TCIL will eventually combine three dormant and non-operating subsidiaries concurrently.
Mahesh Iyer, Managing Director and CEO of Thomas Cook India Limited stated, “This demerger and restructuring unlocks tremendous value and potential for TCIL shareholders by streamlining the existing capital structure and resulting in improved Earnings Per Share. Additionally, the demerger and restructuring make it possible for SHRL to list in the future and choose its own course in India’s quickly growing hotel industry.
