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Cox and Kings sells camping business to French firm for £89.2 million

LiveMint logoLiveMint 02-06-2014 P.R. Sanjai

Mumbai: Travel firm Cox and Kings Ltd said it has sold the camping division of its Holidaybreak Ltd unit to France’s Homair Vacances for £89.2 million (around `883 crore).

Cox and Kings will get £85.5 million in cash on completion of the deal and an additional £3.7 million in the form of a deferred payment and relates to a tax refund, the company said on Monday.

The sale proceeds would be used for cutting the company’s debt, which stands at `4,200 crore, said Anil Khandelwal, chief financial officer of Cox and Kings. The sale of the camping division is consistent with the company’s strategy of becoming a leisure and education travel group, said Peter Kerkar, executive director of Cox and Kings. Kerkar said there was no synergy between the company’s existing businesses and the seasonal camping business.

“Camping business requires huge capital expenditure and it may suck up free cash flows of our business. With this sale, we are now one step closer to focus on our two main businesses—education and leisure,” Kerkar said. Cox and Kings has set a target of retiring $40 million of debt in the current financial year, excluding the proceeds from the sale of its camping business, Kerkar said, ruling out further acquisitions and entering the hospitality business.

He also said Cox and Kings is expected to start its first outdoor education site in the current financial year with facilities including accommodation, horse riding. The launch of the company’s education tours in India has been delayed because of issues related to acquiring land, Kerkar said. “Now we have decided to opt for the land leasing models instead of owning.”

In September 2011, Cox and Kings, through its UK unit Prometheon Holdings (UK) Ltd, had acquired Holidaybreak for £312 million in an all-cash transaction, marking the biggest overseas acquisition by an Indian travel company. Holidaybreak is a UK-listed specialist travel company operating in the areas of education and activity travel. It has operations in the UK, Germany, Switzerland, Austria, Belgium, the Netherlands and Ireland. The camping division provides outdoor family holidays at 170 third-party-owned campsites across 12 European countries. Homair Vacances is a major operator of outdoor holidays in France. Holidaybreak was advised by Lincoln International (financial advisers) and Eversheds (legal advisers).

Cox and Kings shares closed up 7.91% at `182.10, while the benchmark Sensex ended at 24,684.85 after gaining 1.93% on Monday.

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