Thomas Cook (India) Limited plans restructure
The Board of Thomas Cook (India) Limited (TCIL) has approved, subject to regulatory approvals, a corporate restructuring exercise designed to streamline its business.
The move, which will involve a composite scheme of arrangement and amalgamation, aims to streamlining the company’s businesses into four key verticals namely:
- Travel (outbound, domestic, business travel & MICE)
- Foreign Exchange
- Destination Management Services, and
- Portfolio Investments such as Sterling Holiday Resorts Ltd.
The restructuring also involves consolidating 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 10000 equity shares (of Rs 1 each) held in TCIL.
Travel and non-travel services
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 and 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 focused 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, which 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 focused management, consolidating real estate and also various brands acquired through inorganic growth and eliminating cross holdings.
It also recognises that the nature of markets, challenges, competition, 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.
Madhavan Menon, chairman and managing director of 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 and 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.
“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.”