Thomas Cook (India) Limited (TCIL) announced board approval for a sweeping Composite Scheme of Arrangement. This includes the demerger of its Resorts and Resort Management business into Sterling Holiday Resorts Limited (SHRL), a 4:1 share consolidation, and a reduction in face value from INR 4 to INR 3 per share. The plan aims to streamline operations, unlock shareholder value via a future listing of SHRL, and improve TCIL’s capital structure and earnings per share.
Approval of Composite Scheme of Arrangement
The Board of Directors of Thomas Cook (India) Limited (TCIL), based on committee recommendations, has approved a Composite Scheme of Arrangement involving several key steps concerning TCIL, Sterling Holiday Resorts Limited (SHRL), TC Visa Services (India) Limited (TCVSL), Jardin Travel Solutions Limited (JTSL), and Borderless Travel Services Limited (BTSL).
Key Components of the Restructuring
The Scheme involves the following actions in sequence:
- Demerger: The Demerged Undertaking of TCIL, which comprises the resorts and resort management business, will be demerged into SHRL. Shareholders of TCIL will receive 81 equity shares of SHRL for every 100 shares held in TCIL.
- Share Consolidation (TCIL): Four existing equity shares of TCIL, each with a face value of INR 1, will be consolidated into one equity share of TCIL with a face value of INR 4.
- Merger: TCVSL, JTSL, and BTSL will be merged into TCIL by absorption, resulting in their dissolution without winding up.
- Share Capital Reduction (TCIL): The paid-up equity share capital of TCIL will be reduced by lowering the face value from INR 4 to INR 3 per equity share, without any payment to shareholders.
Details on the Demerger Rationale
The Demerged Undertaking (Resorts business) generated a turnover of INR 70 Crores for the year ended December 31, 2025, representing approximately 0.4% of TCIL’s total standalone turnover for that year. TCIL believes this demerger will allow the resultant listed SHRL to chart its own growth path in the hospitality industry, leveraging SHRL’s existing expertise.
Shareholding Pattern Changes (Indicative)
The demerger will result in changes to the shareholding of SHRL, which is currently a wholly owned subsidiary of TCIL. The indicative post-scheme shareholding for SHRL is:
- Promoters: 65.55% (Includes 7% held by TCIL post-demerger).
- Public: 32.30%.
Note: An acceleration of 65,70,000 ESOP options in TCIL prior to the Record Date 1 will also entitle those specific shareholders to SHRL shares.
Impact of Share Consolidation on TCIL Capital
The consolidation aims to align the share price more closely with the intrinsic value and improve key financial ratios.
- Authorized Capital Change: Reorganized from 1,97,93,00,000 equity shares of Re. 1/- each to 49,48,25,000 equity shares of Rs. 4/- each.
- Paid-up Capital Change: Reorganized from 47,69,50,562 equity shares of Re. 1/- each to 11,92,37,641 equity shares of Rs. 4/- each.
The completion of the consolidation is expected within 15 to 18 months from the date of approval of the Scheme by the Board, subject to regulatory clearances.
Impact of Share Capital Reduction
The reduction of the face value from Rs. 4 to Rs. 3 per equity share is intended to create a more efficient capital structure for TCIL, leading to improved earnings per share. There will be no change in the total number of equity shares or the proportion held by existing TCIL members.
Merger of Transferor Companies
The merger of the three wholly owned subsidiaries—TCVSL, JTSL, and BTSL—with TCIL is aimed at streamlining the corporate structure and reducing unnecessary compliance and administrative costs. These transferor companies were largely dormant or non-operative.
Implementation Timeline
The Board Meeting where these approvals were granted commenced at 3.45 P.M. (IST) and concluded at 6.00 P.M. (IST).
Source: BSE
