Parent co has no plan to sell Indian arm: Thomas Cook

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Parent co has no plan to sell Indian arm: Thomas Cook

Putting to rest rumours, Madhavan Menon, the managing director of Thomas Cook India tells CNBC-TV18 that the parent company, Thomas Cook PLC, has no plans to sell off its Indian arm.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See latest News about Thomas Cook See previous management interviews See what other Experts & Brokerages are saying about Thomas Cook Thomas Cook BSE | NSE 29/05/12 Are Mutual Funds betting on Thomas Cook?

Putting to rest rumours, Madhavan Menon, the managing director of Thomas Cook India tells CNBC-TV18 that the parent company, Thomas Cook PLC, has no plans to sell off its Indian arm. "On the issue of whether the parent has now decided to sell Thomas Cook India, I think that is pure speculation and it's driven by yesterday's report," he said.

He goes on to say that Thomas Cook's plans to pledge its shares is a part of a process of renegotiated their buying facilities with banks because they were reaching their cash credit limits. "But since they are a publicly listed company, any plans of the parent company to pledge shares will not affect their business," he added.

Below is an edited transcript of his interview with Latha Venkatesh and Sonia Shenoy. Also watch the accompanying video.

Q: Is that true that your UK parent pledged its shares only with the eventual understanding with RBS to selloff it's stake?

A: Yesterday's event of pledging the shares is a part of a process that started several months ago when the parent, Thomas Cook PLC, renegotiated their buying facilities with the banks. So what happened yesterday was not something new, it was expected over a period of time.

On the issue of whether the parent has now decided to sell Thomas Cook India, I think that is pure speculation and it's driven by yesterday's report. As I talk to you, there is nothing on the table. I would like to reiterate that Thomas Cook India is a public listed company, so whether the shares are pledged or not, it will not impact our business in any way at this time.

Q: You have clarified that there is no decision to sell the Indian arm at this point in time, but can you tell us if there are any conversations with buyers? Clearly the UK parent is sitting on a huge debt and is looking for ways to scale it down?

A: I am not aware of any conversations that are going on. I have been actively involved in the consultation process regarding the pledge and everything else, so I would like to reiterate that I am not aware of any conversations. I think the reports that have appeared in the press today are purely speculative.

Q: Your point is that because the UK parent was reaching cash credit limits with the bank, it pledged these shares by way of collateral and guarantee?

A: Absolutely right.

Q: You were reiterating that even if there was a sale, your business will not be affected. If you worked as an independent entity and not as an arm of Thomas Cook PLC, would not that in some way kind of reduce the clout you have with international passengers?

A: That we would or we would not be with the group is speculative, so let me not go there. If you look at the business model of Thomas Cook India, the primary businesses are the foreign exchange business and the outbound business, neither of which has got any connections with the parent.

The only area that we have some relationship with the parent in terms of business is the inbound business and even here that only represents about 30% of our total inbound volumes and in revenues terms it's less than 0.5% of our total revenue.