The Board of Thomas Cook (India) Limited (TCIL) has approved a complex Composite Scheme of Arrangement involving four major steps: the demerger of the Resorts business into Sterling Holiday Resorts Limited (SHRL), consolidation of TCIL shares (4:1), reduction of TCIL’s share face value (INR 4 to INR 3), and the absorption of three dormant subsidiaries. This aims to unlock shareholder value, streamline capital structure, and enable future listing of SHRL.

Thomas Cook Announces Comprehensive Restructuring Scheme

The Board of Directors of Thomas Cook (India) Limited (TCIL) has approved a comprehensive Composite Scheme of Arrangement, following recommendations from the Independent Directors and Audit Committees. This scheme targets a fundamental reorganization of the company’s structure through four integrated steps.

Part 1: The Demerger of Resort Business

The primary component involves the demerger of the Demerged Undertaking—specifically the resorts and resort management business—from TCIL (the Demerged Company) into Sterling Holiday Resorts Limited (SHRL, the Resulting Company).

• Business Rationale: The move is intended to unlock value for TCIL shareholders by allowing SHRL, which specializes in hospitality, to operate as a separate, listed entity, charting its own growth path in the hospitality industry. TCIL will retain its core travel businesses.
• Turnover Context: The Demerged Undertaking accounted for a turnover of INR 70 Crores for the year ended December 31, 2025, representing approximately 0.4% of TCIL’s total standalone turnover that year.
• Share Exchange Ratio: In consideration for the demerger, SHRL will issue and allot 81 fully paid-up equity shares of face value INR 10 each for every 100 fully paid-up equity shares of face value INR 1 each held by TCIL shareholders.
• SHRL Post-Scheme Shareholding (Indicative): Promoters are expected to hold 65.55% (including 7% held by TCIL), with the Public holding the remaining 32.30%.

Part 2: Consolidation of Share Capital

TCIL will undertake a Consolidation of Share Capital:

• Ratio: Four (4) equity shares of TCIL, each with a face value of INR 1, will be consolidated into One (1) equity share of TCIL with a face value of INR 4.
• Objective: This is intended to enhance key financial ratios, better reflect the intrinsic market value of the shares, and convey stronger financial stability metrics.
• Capital Change: The authorized share capital of TCIL will reorganize from 1,97,93,00,000 equity shares of INR 1 each to 49,48,25,000 equity shares of INR 4 each. The paid-up capital will move from 47,69,50,562 shares (INR 1 FV) to 11,92,37,641 shares (INR 4 FV).

Part 3: Reduction of Share Capital

Subsequent to the consolidation, TCIL will implement a Reduction of Share Capital:

• Face Value Change: The face value of paid-up equity shares will be reduced from INR 4 per share to INR 3 per share.
• Consideration: This reduction will be without any payment to the shareholders. The number of equity shares will remain unchanged, ensuring existing proportions are maintained, but the aim is to achieve a more efficient capital structure and improve earnings per share (EPS).

Part 4: Merger of Dormant Subsidiaries

The scheme includes the merger by absorption of three transferor companies into TCIL:

1. TC Visa Services (India) Limited (‘TCVSL’)
2. Jardin Travel Solutions Limited (‘JTSL’)
3. Borderless Travel Services Limited (‘BTSL’)

These three entities are wholly owned subsidiaries and are currently dormant or non-operative. Their absorption is designed to streamline the corporate structure and reduce unnecessary compliance and administrative costs. As TCIL holds all shares, no new shares will be issued in consideration for this merger.

Implementation Timeline

The entire composite scheme is subject to receipt of requisite approvals from various regulatory bodies. The expected time for completion, subject to securing all necessary sanctions, is estimated to be between 15 to 18 months from the date of the Board’s approval.

Company Context

TCIL is noted as the leading omnichannel travel company, offering services across Foreign Exchange, Corporate Travel, MICE, and Leisure Travel. The company maintains a strong credit profile, having received the highest ratings (CRISIL AA/Stable and CRISIL A1+) for a travel and tourism company in India. Its promoter, Fairbridge Capital (Mauritius) Limited (a subsidiary of Fairfax Financial Holdings Limited), holds 63.83% of the paid-up capital.

Source: BSE