Travel major Cox & Kings's unit has raised Rs 450 crore by selling 11.58 percent stake in its subsidiary Promotheon Holdings UK (PHUK) to SSG Capital Management, a private equity firm.
PHUK holds the education and hybrid hotels businesses of Cox & Kings. The company is a subsidiary of Promotheon Enterprises (PEL), a unit of Cox & Kings.
After the sale, PEL's stake in its unit will come down to 54 percent. SSG Capital, which had bought into PHUK in November last year, will see its stake increase to 46 percent. Last year, the private equity firm had acquired the stake from The Rohatyn Group.
"We have been unlocking value in our units since last year. We wanted to demonstrate that the valuation in all our subsidiaries is much more than consolidated value of our company that is listed," Peter Kerkar, Group CEO, Cox & Kings told Moneycontrol.
The latest deal values PHUK's equity at USD 653 million, up from USD 615 million in November 2017.
Kerkar said the funds will be used to reduce the company's debt. "In the last quarter we had a gross debt of Rs 4,110 crore, as on December 31."
Unlocking value
In May last year, Cox & Kings had demerged its foreign exchange business and started a non-banking finance company (NBFC).
The company is in the process of getting a license, and will introduce products such as holiday finance and overseas student finance through its planned NBFC.
"We will continue to evaluate the best opportunities for our units, whether it is in stake sale or in going for an initial public offering," said Kerkar. He said more plans will be announced in the next 18 months.
Education and hotels
PHUK's education business centres around providing experiential learning and residential outdoor learning programmes. The company claims to be the market leader in the UK.
"We have added three new properties, including one in Australia where we are now the biggest player," said Kerkar.
The hotel business runs under the brand of Meininger. "We have increased our capacity to 10,400 rooms this year, from 7,000 last year. In the next financial year, we plan to further expand it to 15,000 room," he added.
At present, the rooms are spread across 20 hotels in 12 European cities.
Kerkar added the company will explore opportunities to list its overseas business in international exchanges.
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