Cox & Kings Ltd., the Indian travel company, is exploring a potential sale of European hospitality chain Meininger Hotels as it seeks to cut debt, according to people with knowledge of the matter.

The company is working with Lazard Ltd. to gauge interest from potential suitors for Berlin-based Meininger, said the people, who asked not to be identified because the information is private.

Meininger operates 28 budget hotels in Germany and other parts of Europe, including recent openings in Brussels and Heidelberg, and has a pipeline of about 15 more locations. The business recorded about 111 million euros ($122 million) of revenue for the year through March 2019, one of the people said.

Shares of Cox & Kings, which defaulted on some of its borrowings earlier this year, have fallen 98% over the last 12 months to give it a market value of about $11 million. It had about $424 million of debt at the end of March, data compiled by Bloomberg show.

Cox & Kings said in July its working capital situation has been stretched by difficulties replacing short-term loans with longer-term borrowings. The company is taking “all required measures” to resolve the cash flow mismatch and is “evaluating each business” to improve operational performance, it said in an exchange filing at the time.

No final decisions have been made, and there’s no certainty the deliberations will lead to a transaction, the people said. Cox & Kings could decide to keep the business, the people said. Representatives for Cox & Kings, Lazard and Meininger declined to comment.

Investors have been drawn to the European hospitality industry this year, with Goldman Sachs Group Inc.’s merchant banking arm entering exclusive talks in May to acquire European chain B&B Hotels. In March, Singapore sovereign wealth fund GIC Pte agreed to invest in Dutch budget hotel operator citizenM in a deal valuing the company at about 2 billion euros.

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Photo Credit: Meininger Budapest Great Market Hall. Parent company Cox and Kings is reportedly exploring a sale of the chain. Meininger