DRMumbai: The Board of Thomas Cook India Limited (TCIL) has approved (subject to regulatory approvals) a corporate restructuring exercise by way of a composite scheme of arrangement and amalgamation, aimed at streamlining its businesses into four key verticals, namely: Travel (outbound, domestic, business travel & MICE), Foreign Exchange, Destination Management Services & Portfolio Investments such as Sterling Holiday Resorts Ltd.
The restructuring also involves the consolidating of the human resource services business into Quess Corp. Pursuant to the composite scheme, TCIL shareholders will receive 1889 equity shares of Quess (of Rs. 10 each) for every 10,000 equity shares (of Re. 1 each) held in TCIL.
In its current structure, TCIL along with its subsidiaries and associate companies such as SOTC, TCI, TC Travel (earlier Tata Capital Travel) and Sterling Holidays are engaged in various travel and travel-related financial services, vacation ownership and resorts while Quess Corp. is engaged in human resource & business-related services such as industrial asset management, integrated facility management, human resource services & technology solutions. In order to streamline the various businesses of the Group, both from operating and management perspective, the restructuring will consolidate like businesses into identified entities creating a simpler and more efficient operating structure with dedicated and focussed business verticals.
The last few years have seen the TCIL Group make many travel and non-travel related acquisitions from Quess to Sterling, SOTC, Kuoni Hong Kong, Kuoni’s multiple DMS entities across 21 countries and Tata Capital’s erstwhile Travel & Forex businesses – now renamed TC Travel & Forex. Quess, meanwhile, also made several acquisitions both in India and overseas in line with its own areas of operation. This had created complex structures both at the Quess level as well as the Travel Group level. The proposed restructuring is aimed at simplifying and clarifying structure and holdings, streamlining businesses and resources, ensuring focussed management, consolidating real estate and also various brands acquired through inorganic growth and eliminating cross holdings. The proposed restructuring also recognises that the nature of markets, challenges, competition and opportunities for the human resource businesses are distinct and separate from the travel and travel-related businesses and each are capable of attracting a different set of investors, strategic partners and stakeholders.
On the proposed restructuring, Madhavan Menon, Chairman & Managing Director, TCIL said: “This proposed restructuring with the realignment of the travel businesses of TCIL and consolidation of the human resource services business into Quess Corp, will simplify the Group structure, enabling both TCIL & Quess to grow independently and consolidate their positions in their segments with far greater clarity of focus from an industry and growth/opportunity point of view – for investors, management and teams.”
He added, “Post this proposed restructuring, TCIL becomes a Travel Focused company when the economy and industry are poised for rapid growth especially from an India/Asia opportunity, while Quess a proven market shaper already, charts its own growth trajectory in the high growth opportunity space of Human Capital and allied services. We believe that the proposed restructuring will give our individual lines of business the advantages of flexibility and the integration of size, scale and financial strength to take us to the next level of growth.”
The swap ratio has been worked out by Talati & Talati, Chartered Accountants. RBSA Capital Advisors LLP, Category I Merchant Bankers, have provided their fairness opinion on the said valuation.
