Thomas Cook India on Thursday said it received board approval to buyback of 2.60 crore equity shares at Rs 57.50 each.
Thomas Cook (India) has received approval from its board of directors for buyback of up to 2,60,86,956 fully paid up shares at Rs 57.50 per share for a maximum aggregate amount of Rs 150 crore. The buy-back price per share is Rs 57.50 each. The buyback record date has been fixed as 7 March 2020 and the transaction will be entirely funded by internal accruals."The perceived negative impact of the Coronavirus on travel businesses, has affected the company's share price and hence, the buy-back signals to shareholders the management's confidence in the strong fundamentals and growth prospects of the company," the firm said in a statement issued during trading hours today, 27 February 2020.
The majority shareholder, Fairbridge Capital Mauritius (A Fairfax Group company) will not participate in the buyback.
Madhavan Menon, chairman & managing director, Thomas Cook (India) said, "The buy-back scheme is primarily intended to increase shareholder value as the income arising to the shareholder on account of buy-back of shares is exempt from tax. We have ensured that the interests of our small shareholders are protected via the reservation process and additionally, the flexibility in our buy-back scheme offers our shareholders the choice of cash via participation or a resultant increase in their percentage holdings with no additional investment."
"The buy-back will signal confidence to our shareholders and unlock the underlying value of the diversified Thomas Cook India Group. The combined impact of a sluggish economy and difficult trading conditions due to the prolonged direct impact of the Corona Virus, have resulted in slowing demand across our businesses. Given that this coincides with the peak booking season for the summer vacations, we anticipate a cascading negative impact on our results. That said, we are confident that our strong fundamentals and financial position will see us through the current challenging environment and we are focussed on taking all necessary measures to ensure our sustainability and long term growth."
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Thomas Cook (India)'s consolidated net profit dropped 29.7% to Rs 6.46 crore on a 11% rise in net sales to Rs 1,727.02 crore in Q3 December 2019 over Q3 December 2018.
Thomas Cook (India) fell 1.49% to Rs 49.45. It was trading in the range of Rs 48.05 to Rs 50.50 so far.
Thomas Cook (India) provides travel and travel related financial services which include foreign exchange, corporate travel, insurance, visa and passport services, gift cards, hotel bookings, flight ticket bookings, tour packages and electronic business.
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