Thomas Cook India Limited Buyback 2020

(i) Thomas Cook (India) Ltd. (TCIL) is the leading integrated travel and travel-related financial services company in the country offering a broad spectrum of services that include Foreign Exchange, Corporate Travel, MICE, Leisure Travel, Insurance, Visa & Passport services, and E-Business. The company set up its first office in India in 1881.

(ii) The Thomas Cook India Group spanning 21 countries across 4 continents, a team of over 198,500 and a combined revenue in excess of Rs. 8700 crore (over $ 1.34 billion), operates leading B2C and B2B brands including, Thomas Cook, SOTC, TCI, Sita, Asian Trails, Allied T Pro, Australian Tours Management, Desert Adventures, Travel Circle International Limited, Private Safaris East & South Africa. The Group is today one of the largest travel service provider networks headquartered in the Asia-Pacific region.

(iii) Thomas Cook (India) Limited is promoted by Fairfax Financial Holdings Limited through its wholly-owned subsidiary, Fairbridge Capital (Mauritius) Limited and its controlled affiliates which holds 67.61%. Fairbridge is responsible for the execution of acquisition and investment opportunities in the Indian subcontinent on behalf of the Fairfax family of companies.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Mar 07 2020
Buyback Offer Amount: ₹ 150
Date of Board Meeting approving the proposal: Feb 28 2020
Date of Public Announcement: Feb 28 2020
Buyback Offer Size: 6.90%
Buyback Number of Shares: 26086596
Price Type: Tender Offer
FV: 1
Buyback Price: ₹ 57.50 Per Equity Share

Details of Buyback:

The buy-back of up to 2,60,86,596 fully paid equity shares of the face value of Rs. 1/- each at a price of up to INR 57.50 per share aggregating up to INR 150 Crores which represents 9.57% of the paid-up equity share capital and free reserves of the Company through " Tender Route". The company has fixed Record date as 07.03.2020.

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of Thomas Cook India Limited Buyback 2020 in demat or physical form as on record date on [ 07.03.2020 ] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [ Not Announced ] by selling your shares through your broker on NSE or BSE. 3. Then on [ Not Announced ], the settlement will be done for accepted shares and unaccepted shares will be returned to your demat account

Profit from the buyback on the bases of acceptance Ratio:

Buy 3478 Shares at CMP of Rs.46.95( 2,00,000/57.50=3478)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 163304 163304.35 163304.35 163304.35
No. of Shares buyback 1148 1739 2609 3478
BuyBack Profit 12,109 18,346 27,520 36,693
Profit 7.41% 11.23% 16.85% 22.47%

Recommendation:

Review and Recommendation of Thomas Cook India Limited from our side is :Rating: 3/10

    Hi Bro,

    Why rating is very low, what are the Pro,s and Con’s, could you please post.

    Thanks.

      The company do business in the tour and travel industry, and coronavirus will have a deadly impact on this business.

      Pros- The AR could be high as promoters are not participating and good arbitrage is available from CMP.

    Good price to buy stock on Monday for the buyback, as the majority shareholder, Fairbridge Capital Mauritius (A Fairfax Group company) will not participate in the buyback.

    The company’s fortune has dwindled over a year. The company was trading at Rs. 125 last year, is now available at just 45.

    However, the buyback is a premium of 40% from the CMP.

    Total Public Shareholding is 12 Cr shares, Promoters are not offering their shares.

    So, AR can come around 20-25%.