Cox & Kings Trans­fers Stake in Two Arms to Malvern

The Economic Times - - Companies - Divya.Sathya­narayanan @times­group.com

Mum­bai: Travel firm Cox & Kings has trans­ferred its stake in two sub­sidiaries, ho­tel book­ing web­site LateRooms UK and short-break spe­cial­ist Su­perbreak, to Malvern En­ter­prises UK, a spe­cial pur­pose ve­hi­cle it formed with a Europe­based pri­vate eq­uity in­vestor. The com­pany said it sold 100% in LateRooms – which it ac­quired in Oc­to­ber last year - to Malvern En­ter­prises for £20 mil­lion (Rs 189.02 crore). Cox and Kings’ 65.58%-owned sub­sidiary, Hol­i­day­break, sold 100% of its Su­perbreak busi­ness to Malvern in a trans­ac­tion whereby Hol­i­day­break re­ceived a net cash con­sid­er­a­tion of £9.25 mil­lion. Cox & Kings owns 49% of Malvern En­ter­prises, with the PE firm hold­ing the rest.

Chief Fi­nan­cial Of­fi­cer Anil Khandelwal said the SPV was setup re­cently when the trans­ac­tion was con­cep­tu­alised. Post the deal, Cox & Kings ef­fec­tively holds 49% in both LateRooms and Su­perbreak. “We ac­quired LateRooms last year and the pri­mary ob­jec­tive was that it gave a sub­stan­tial lever­age to con­vert the Su­perbreak busi­ness into a B2C busi­ness over time. From our per­spec­tive, the syn­er­gies of Su­perbreak and LateRooms are im­mense but the syn­ergy will take time. Mean­while, we got this op­por­tu­nity where a pri­vate eq­uity in­vestor was will­ing to in­vest in these two com­pa­nies along with us and that’s why we seized the op­por­tu­nity,” said Khandelwal. Through the trans­ac­tion Cox & Kings re­ceived £22.88 mil­lion cash, which has been used to re­duce debt.

The trans­ac­tion is ef­fec­tive March 31. Cox & Kings’ 49% eq­uity stake in Malvern will be ac­counted as an in­vest­ment in an as­so­ci­ate com­pany and the pro­por­tion­ate share of earn­ing will be re­flected in the travel firms’ ac­counts from fis­cal year 2017. While Cox & Kings had ac­quired 100% stake in LateRooms for £14 mil­lion.

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