Leisure travel company Cox & Kings’ UK arm, Prometheon Holdings, has raised additional capital of $137.75 million (about Rs 750 crore) from Citi Venture Capital International (CVCI) Private Equity. With this, CVCI has acquired a minority stake in the company.
In September 2011, Prometheon had bought UK-based tour operator Holidaybreak for Rs 2,300 crore.
Peter Kerkar, director, Cox & Kings, said, “We see many opportunities to consolidate, grow, and over time, export the competence built over decades in Holidaybreak’s different divisions, building new revenue streams in significant markets like Australia and India. Holidaybreak has a strong education travel business in Europe, which has grown despite difficult business conditions in the region.”
The investment proceeds would be largely used to retire part of the debt raised by Prometheon for the Holidaybreak acquisition. “This investment is part of CVCI’s strategy of leveraging cross-border capabilities to back strong companies from emerging markets, as they expand their global presence. We look forward to working with Peter and his team to develop this business,” stated Sunil Nair, managing partner (India, Europe, West Asia and Africa), CVCI Private Equity.
The Cox & Kings board had approved raising additional capital of up to $140 million in Prometheon, following which CVCI Private Equity had agreed to invest $137.75 million in Prometheon.
Cox & Kings had raised the equivalent of Rs 1,400 crore in dollar debt to finance the deal and its interest costs have risen 700 times after the takeover. On a consolidated basis, Cox & Kings reported a loss of Rs 26 crore in the quarter ended March, against a profit of Rs 46 crore in the year-ago period. However, in the quarter ended June, the company’s net sales rose to Rs 531 crore, while consolidated profit after tax stood at Rs 147 crore. Cox & King shares closed 5.42 per cent higher at Rs 147.8 in a weak Mumbai market after earlier gaining as much as 8.2 per cent following the announcement.
