The board of Thomas Cook (India) Ltd (TCIL) has given its in-principle approval for the demerger of its Resorts and Resort Management business into Sterling Holiday Resorts Ltd (SHRL), along with a subsequent capital restructuring of the former. The proposal is subject to final approval from the National Company Law Tribunal (NCLT).
The demerger will unlock value for TCIL shareholders by separating the Resorts and Resort Management business into SHRL, paving the way for a future listing of SHRL, Managing Director & CEO Mahesh Iyer said.
Sharpening Strategic Focus Across Business Verticals
The move is expected to streamline TCIL’s capital structure, resulting in improved earnings per share for shareholders. It will also enable sharper strategic and operational focus across each business vertical, allowing the company to pursue sector-specific growth strategies with greater agility.
TCIL currently owns and/or operates six resorts across India under the Nature Trails brand.
Share Swap and Listing Plans Outlined
Under the proposed composite scheme of arrangement, TCIL shareholders will receive SHRL shares as consideration for the demerger, based on a share entitlement ratio of 0.81 shares of SHRL for every share of TCIL held.
TCIL will continue to hold its existing number of shares in SHRL post-demerger, with the promoter and public shareholding pattern of both companies remaining similar. Shares of SHRL will be listed on the BSE and the National Stock Exchange of India.
Capital Restructuring and Subsidiary Merger
As part of the restructuring, TCIL will consolidate four shares of face value ₹1 each into one share of face value ₹4, and subsequently reduce the face value to ₹3 per share.
In parallel, TCIL will merge three dormant wholly owned subsidiaries, TC Visa Services (India) Ltd, Jardin Travel Solutions Ltd and Borderless Travel Services Ltd, to reduce administrative costs.
“The demerger and restructuring also paves the way for a future listing of SHRL, enabling it to chart its own course in the rapidly expanding hospitality space in India,” Iyer said.