Based on a recommendation by the audit committee and independent committee, the Board of Thomas Cook (India) Limited (TCIL) gave an in-principle approval to 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
The proposed demerger and restructuring are subject to NCLT and other regulatory approvals.
This demerger and restructuring is being undertaken to:
1. Unlock value for the shareholders of TCIL by demerging the Resorts and Resort Management business into SHRL, and to attract differentiated investor cohorts for each business segment
2. Streamline the existing capital structure of TCIL, which will result in improved Earnings Per Share
3. Enable sharper strategic and operational focus across each business vertical and pursue sector-specific growth strategies with agility
TCIL owns and/ or operates 6 resorts directly under the brand name Nature Trails. These resorts are spread across India in several scenic locations and offer a host of curated services across multiple attractive market segments including adventure holidays, educational trips and corporate getaways. TCIL will demerge this business into SHRL as part of the demerger.
The proposed demerger and restructuring, under a composite scheme of arrangement, will entail the following steps:
A. TCIL will demerge its Resorts and Resort Management business into SHRL.
• TCIL shareholders will receive SHRL shares as consideration for the demerger and in accordance with the share entitlement ratio of 0.81 shares of SHRL for every share of TCIL
• TCIL will continue to hold its current number of shares in SHRL post the demerger • The promoters and public shareholding pattern of TCIL and SHRL will remain similar post the demerger
• Shares of SHRL will be listed on BSE and NSE
B. TCIL will consolidate 4 shares of face value Rs.1 each into 1 share of face value Rs. 4 each.
C. TCIL will reduce the face value of its shares from Rs. 4 per share to Rs. 3 per share D. TCIL will in parallel, merge 3 dormant and non-operating subsidiaries to reduce administrative costs.
Commenting on the announcement, Mahesh Iyer – Managing Director & CEO of Thomas Cook India Limited, said, “I am delighted to announce this demerger of Thomas Cook’s Resorts and Resort Management business into Sterling Holiday Resorts Limited. This demerger and restructuring unlock tremendous value and potential for TCIL shareholders by streamlining the existing capital structure and resulting in improved Earnings Per Share. The demerger and restructuring also paves the way for a future listing of SHRL, enabling it to chart its own course in the rapidly expanding hospitality space in India.”
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