Thomas Cook India shares fall 12% despite clarification on bankruptcy
Shares of Thomas Cook India Ltd extended losses for the second straight session to hit a month’s low on Tuesday, despite the firm clarifying to the exchanges that it is not a part of Thomas Cook UK.
Reacting to the Thomas Cook UK bankruptcy reports, the share price of Thomas cook India fell over 12% to its intraday low of Rs 135.05, also its months’ low, against the last closing price of Rs 153.65 on the BSE.
The stock’s fall is also in-line with the downtrend in the ‘Travel Services’ sector, declining at 4.62% on BSE. The stock has fallen 8.24% in the last 2 days.
Thomas Cook shares have moved below its 30-day simple moving average in today’s trade and already trades lower than its 50, 150 and 200-day moving average. The stock has been highly volatile today with an intraday volatility of 6.23%. Volume-wise, shares amounting to 1.9 lakh and 18 lakh are currently changing hands on BSE and NSE, both above 5, 10 and 30-day average volume traded. So far this year, the stock has fallen 40%.
In the company’s press release dated September 23, 2019, titled, ‘Thomas Cook India reiterates that there is no impact due to Thomas Cook PLC collapse in the UK’, the firm explained how Thomas Cook India Group is a completely separate entity from Thomas Cook PLC since August 2012 when it was acquired by Fairfax Financial Holdings (Fairfax), a Canada based multinational with varied interests across the globe as well as in India.
Madhavan Menon, Chairman & Managing Director, Thomas Cook (India) Ltd. (TCIL) also commented on the complete independence of the entity and highlighted the financials of the company. He said, “The Thomas Cook India Group’s cash and bank deposits balances stand at Rs 1,389 cr n as of June 30, 2019. Thomas Cook India is debt-free upon pre-payment of Rs 67 cr debenture obligations ahead of schedule. This has been made possible using growing and sustainable cash flows that the Thomas Cook India Group generates year over year. The Group generates an average annual free cash flow of around Rs 250 cr”. The company has also scheduled a conference call today at 2:30 PM.
In a separate development, the company submitted a separate filing clarifying the new article published on Moneycontrol dated 20 September. The report said the Ministry of Corporate Affairs (MCA) is probing Thomas Cook (India) in relation to a ‘suspicious’ money transaction with a Delhi-based forex trader. “State for the record that both the headline and contents of the article are factually incorrect and malicious in intent for the news article, quoting,’Thomas Cook India under MCA scanner over suspicious transaction”, the company said in its filing to the exchanges
The filing added,”We have received no intimation from the Ministry of Corporate Affairs and have no existing relationship with Aarush Forex Private Limited, a baseless and highly damaging article has been posted that clearly maligns Thomas Cook India.”