Cox & Kings Is Said to Weigh Sale of Meininger Hotel Chain
Meininger operates 28 budget hotels in Germany and other parts of Europe, including recent openings in Brussels and Heidelberg.
(Bloomberg) -- Cox & Kings Ltd., the Indian travel company, is exploring a potential sale of European hospitality chain Meininger Hotels as it seeks to cut debt, according to people with knowledge of the matter.
The company is working with Lazard Ltd. to gauge interest from potential suitors for Berlin-based Meininger, said the people, who asked not to be identified because the information is private. Shares of Cox & Kings fell as much as 10.3% in Tuesday trading, hitting a record low, and were down 4.5% at 2:18 p.m. in Mumbai.
Meininger operates 28 budget hotels in Germany and other parts of Europe, including recent openings in Brussels and Heidelberg, and has a pipeline of about 15 more locations. The business recorded about 111 million euros ($122 million) of revenue for the year through March 2019, one of the people said.
Shares of Cox & Kings, which defaulted on some of its borrowings earlier this year, have fallen 98% over the last 12 months to give it a market value of about $10.4 million. It had about $424 million of debt at the end of March, data compiled by Bloomberg show.
Cox & Kings said in July its working capital situation has been stretched by difficulties replacing short-term loans with longer-term borrowings. The company is taking “all required measures” to resolve the cash flow mismatch and is “evaluating each business” to improve operational performance, it said in an exchange filing at the time.
No final decisions have been made, and there’s no certainty the deliberations will lead to a transaction, the people said. Cox & Kings could decide to keep the business, the people said. Representatives for Cox & Kings, Lazard and Meininger declined to comment.
Investors have been drawn to the European hospitality industry this year, with Goldman Sachs Group Inc.’s merchant banking arm entering exclusive talks in May to acquire European chain B&B Hotels. In March, Singapore sovereign wealth fund GIC Pte agreed to invest in Dutch budget hotel operator citizenM in a deal valuing the company at about 2 billion euros.
--With assistance from Carol Zhong, Baiju Kalesh, Debjit Chakraborty and Eyk Henning.
To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Jack Sidders in London at jsidders@bloomberg.net;Vinicy Chan in New York at vchan91@bloomberg.net
To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, ;Shelley Robinson at ssmith118@bloomberg.net, ;Kenneth Wong at kwong11@bloomberg.net, Ben Scent, Amy Thomson
©2019 Bloomberg L.P.