Cox & Kings to Sell Businesses to Raise Much-Needed Cash

Indian travel group Cox & Kings is looking to sell assets as part of a plan to raise much-needed funds.

The company’s share price has fallen by half in the last month and on Thursday it revealed it had defaulted on debt payments, having paid only $7.3 million (500 million rupees) of the $29 million (2 billion rupees) owed.

Several credit ratings agencies have also downgraded the company, adding to its problems.

"[D]ue to cash flow mis-match and a situation exacerbated by rating downgrade, the company proposes to meet its financial obligations through a combination of internal accruals and monetisation of assets. The company is working towards plans to make good its obligations," Cox & Kings said in a stock market announcement.

Last year Cox & Kings sold its educational travel business to Midlothian Capital Partners for $600 million.

One way to raise the cash would be to sell more of its international businesses, which could see the company refocus on India but this would further reduce its revenue streams.

Up for Sale?

As well as several brands in India, Cox & Kings has investments in companies across the world. It owns the fast-growing Meininger hybrid hostel/hotel chain, as well as niche tour operators in Dubai, the United Kingdom, the United States, Australia and Japan.

In 2019, Meininger made a full-year profit (ebitda) of $25.2 million (1.7 billion rupees), up 34 percent on 2018, while the international leisure business saw its profit increase 26 percent to $27.9 million (2.45 billion rupees).

Meininger, which was caught up in the Paradise Papers document leak, would be the obvious sale as it's pretty separate to the rest of the company and would be an attractive purchase for a rival hostel companies or perhaps a private equity firm looking to start some consolidation.

One asset that doesn't look to be up for sale is Cox & Kings' investment in UK-based Malvern Group.

It owns a 49 percent stake in the business, which includes tour operator Super Break and online travel agency LateRooms.com. The rest is held by Cayman Islands-based Adiuvat Investment Fund.

"In regards to the recent Cox & Kings news, Malvern Group is a holding asset. However, we are unaffected by the news," Malvern Group said in a statement.

"Cox & Kings are a minority shareholder in the Malvern Group and we will not be looking for another.

Cox & Kings claims to be the longest established travel company in the world and can trace its roots back to 1758 when Richard Cox a secretary in the British army, started the business.

Skift asked Cox & Kings and Meininger for comment on potential sales but has yet to get a response.