Thomas Cook India gets a new avatar

After tours, forex, visa and travel insurance, Thomas Cook India (TCI) is all set to transition into an investment vehicle for Fairfax Holdings Ltd that bought a 77% stake in Thomas Cook last March for about Rs 810 crore. Fairfax will invest monies and acquire companies through TCI while running the company’s travel business. The first signs of strategic shift were seen in February when Thomas Cook acquired 76% stake in Ikya, a staffing solutions firm.

Fairfax is run by Canadian billionaire investor Prem Watsa (referred to as Canadian Warren Buffet). His other investments include a 26% stake in ICICI Lombard general insurance. He recently grabbed headlines for his bid to acquire Blackberry, the struggling smart phone maker.

Last year Thomas Cook India generated Rs 105 crore in free cash. Managing director Madhavan Menon expects the free cash to keep growing with growth in business and cash flow from investments. “The idea of making Thomas Cook a vehicle which is publicly listed body is to buy unlisted companies underneath and create share holder value at the Thomas Cook level. The way we work at Fairfax is that we buy into the management. In Ikya 76% is our stake but 24% is held by Ikya’s management team,” Madhavan added.

Read full report here,  Business Standards


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