US-based Ebix Inc and India-headquartered MakeMyTrip have joined the race to acquire cash-strapped travel company Cox & Kings , two people familiar with the development told ET.
The online travel businesses are drawn by the prospect of acquiring the high-end, outbound, loyal customers of one of the country’s oldest brick and mortar travel companies, they said.
Talks are being held with Cox & Kings promoter Peter Kerkar, who owns a little over 21%, of the company, and Yes Bank, which has acquired an 18.55% stake after invoking shares pledged with it against debt, said the people cited above. “The potential acquisition of Cox & Kings by Nasdaq-listed MakeMyTrip is a natural extension that will help in ramping up its business in acquiring sticky customers,” said one of the persons quoted above.
Ebix, also Nasdaq listed, acquired Indian online travel company Yatra for $337.8 million (₹ 2,300 crore) last month and is looking at swiftly ramping up its local operation. Ebix has also made a bid for Mumbai-based Trimax IT Infrastructure & Services, which is undergoing bankruptcy proceedings. Kerkar didn’t respond to queries. Nor did Ebix CEO Robin Raina. A MakeMyTrip spokesperson declined to comment. A Yes Bank spokesperson also declined to comment. “As a policy, we do not comment on individual companies,” he said.
In the past few years, Ebix has spent about $1 billion on acquiring companies in India to fortify its presence in the travel and tours space.
“In case Ebix manages to acquire the company, it offers huge complementarity to the Ebix business model that offers online travel services through Yatra,” said one of the persons cited above. Sources said the valuation will depend on the haircut lenders will take. The Cox & Kings stock has taken a beating over the past four months because of difficulties over loan repayments.
Since April 1, market value has plummeted 93% to ₹183 crore based on Friday’s closing price of ₹10.39 on the BSE, from ₹2,485 crore. The promoter’s holding has been dropping continuously—to 39.73% at the end of June from 49.8% from three months before. The stake has declined even further with Yes Bank invoking the share pledge to pick up an 18.55% stake.
The company had total noncurrent debt of ₹1,240 crore and short-term borrowings of ₹1,704 crore on a consolidated basis, according to the FY19 annual report. It has other financial liabilities of about ₹1,500 crore.
