Quess Corp drops 8% as offer for sale opens; Thomas Cook to dilute stake in company
Quess Corp share price fell as much as 8 percent on Thursday as Thomas Cook is reducing its stake in the company through offer for sale that opened today. Thomas Cook share price, however, rallied 6 percent.
The offer for sale issue will close on Friday.
The company informed exchanges that integrated travel and travel related financial services player Thomas Cook India proposed to sell up to 75 lakh equity shares and AAI up to 10 lakh shares through offer for sale.
Thomas Cook’s board on Wednesday also approved a fund raising plan of Rs 600 crore by divesting 5.42 percent stake in its subsidiary Quess Corp.
Fairfax Financial Holdings, through Thomas Cook India Group, holds 56.98 percent stake in Quess Corp, a provider of integrated business services. After stake sale, its shareholding in Quess will stand at 51.56 percent.
The travel company has fixed a floor price of Rs 800 per share for selling shares through offer for sale.
Thomas Cook said the move is to meet Sebi regulations that require promoters to bring down their stake to 75 percent. Post-dilution, the combined promoter shareholding in Quess Corp (of Thomas Cook India and Ajit Isaac, CMD & CEO, Quess Corp) would be 75.38 percent.
Fairfax Financial Holdings, through Thomas Cook India Group, is committed to maintaining a controlling stake in Quess Corp, it said in its filing.
The initiative is also aimed at retiring Thomas Cook long term debt, thus bringing down its financial costs and improving profitability and liquidity at both a standalone and group level.
“Our aim is to retire our long term debt and improve profitability; simultaneously increase our cash reserves, enabling us to effectively leverage opportune investments as and when they arise,” Thomas Cook India Group chairman and managing director Madhavan Menon said.
At 10:08 hours IST, the stock price of Quess Corp was quoting at Rs 861.25, down 5.69 percent while Thomas Cook (India) was rising 4.2 percent to Rs 239.55 on the BSE.