Cox & Kings Debt To Reduce By 60% From Sale Of Education Business
Cox & Kings Ltd., India’s leading travel company, has agreed to sell its education tour business to bring down its debt by 60 percent. Midlothian Capital Partners a United Kingdom-based consumer-focused investment firm, will buy the business for an enterprise value of Rs 4,387 crore or £467 million, Cox & Kings said in a release to the exchanges.
As of June 30, 2018, Cox & Kings had debt of close to Rs 3,883 crore on its books. Rs 939 crore of debt will be transferred as part of the transaction, and the company will use the entire cash proceeds to reduce its remaining debt. The tour operator owns a 51 percent stake in the business, while the remaining is owned by SSG Capital.
Cox & Kings said the sale was prompted by a slowing pace of growth and high capital requirements. The company's spokesperson added that it will now focus on high-growth and asset-light businesses.
After this deal, Cox & Kings will be left with close to Rs 1,500 crore of debt, which it aims to reduce by Rs 350-400 crore every year.
The deal is expected to close by November 23, 2018.
Cox & Kings had acquired the education tour business in 2011 when it completed the purchase of UK-based Holidaybreak for close to Rs 2,300 crore.
The education business provides curriculum-linked experiential learning programmes for students, through residential activity centres and educational travel tours. The company's portfolio of brands includes PGL, NST, EST, Travelworks, and Studylink for students aged 7 up to university.
After the transaction, Cox & Kings will continue to operate in the leisure and hotels segments.