Thomas Cook Collapse Hits Shares of Indian Company It Once Owned
(Bloomberg) -- What’s in a name? A lot, if it’s Thomas Cook.
When London-based Thomas Cook Group Plc collapsed under a pile of debt on Monday, investors beat down the shares of an unrelated company thousands of miles away in India, ignoring multiple clarifications that it isn’t in any way related to the U.K. firm.
Thomas Cook India Ltd. resorted to a communication blitz -- exchange filings, statements to the media and advertisements in local newspapers -- in the past few days to clarify that the collapsed U.K. firm exited the Indian company seven years ago.
Even so, the stock was trading down 3.7% as of 1:57 p.m. in Mumbai on Monday, set for the biggest drop in a month and compared with a 3.2% gain in the main index. The U.K. firm’s shares slumped 23% on Friday, before it filed for insolvency.
The relatively limited decline in Thomas Cook India reflects “how the company did a good job in communicating to the market that it is no more associated with an eponymous U.K. firm that has collapsed now,” said Ashish Shah, head of equity at A C Choksi Share Brokers Pvt. in Mumbai.
Thomas Cook Group sold its entire stake in Thomas Cook India to Fairfax Financial Holdings Ltd. in 2012, according to data compiled by Bloomberg News.
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