Thomas Cook India buys Thomas Cook brand for Rs 13.9 crore
Travel services major Thomas Cook (India) Ltd has signed an agreement to acquire the Thomas Cook brand for Rs 13.9 crore for use in India, Sri Lanka and Mauritius markets, said a senior company official.
 
The company signed an agreement with AlixPartners, Thomas Cook UK's appointed Special Managers, he added.
 
"The brand valuation was done by our internal team and an external team. Both of them arrived at a similar value," Debasis Nandy, President & Group Chief Financial Officer told IANS over phone from Mumbai.
 
Thomas Cook (India) was previously contracted to pay an annual brand licence fee of Rs 2 crore to Thomas Cook UK until 2024 for usage of the brand.
 
The brand license agreement also gave TCIL the right of first refusal to acquire the brand in the event of the Thomas Cook UK Group going into liquidation before 2024.
 
"I didn't think there was an option till 2024 to reduce the price further even though the right of first refusal was with our company. Waiting till 2024 would have resulted in uncertainty as the UK company was sold to a Chinese company. The assets of the UK company were being sold and cash realised to pay off its creditors. There was also the risk of the brand being sold of to somebody else, Nandy said.
 
"It was a fairly decent valuation, seven times of times of the annual royalty," he added.
 
According to him, Thomas Cook (India) now owns the brand and can change the look and feel of the brand.
 
Refuting the view online companies are eating into Thomas Cook (India) business he pointed out the former largely sell airline tickets and hotel rooms whereas his company sells travel packages.
 
"We get 30 per cent of our business or about Rs.500 crore from online sales, Nandy added.
 
Ruling out extending the Thomas Cook brand to other group company's offerings Nandy said the plan now is to consolidate our business and then grow it further.
 
Queried about resort subsidiary Sterling Holiday Resorts he said it will continue to add five/six resorts per year.
 
"Sterling Holiday Resorts will largely into asset management and will not buy or build properties of its own. The idea is be light on assets and save on outlay," Nandy said.
 
He said the travel market is expected to pick up in 2020.
 
Speaking about the market trend he said, tourists are now opting for short haul trips than going for long haul ones.
 
The Thomas Cook India Group continues to remain financially strong with cash and bank deposits balances of Rs. 1,088.3 crore of September 30, 2019. On a standalone basis Thomas Cook India is debt free. The Group generates an average annual free cash flow of around Rs. 200 crore.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • User

    COMMENTS

    Ramesh Poapt

    6 days ago

    company lost mkt price quickly. a value buy?!

    UM Lohia: FADA Seeks PMO Intervention To Stop the JV Company’s Exit from India
    After sending legal notice to UM Lohia Two Wheelers Pvt Ltd (UM Lohia), the Federation of Automobile Dealers Associations (FADA) has requested intervention by the prime minister's office (PMO) to stop exit of the joint venture company from India. UM Lohia is a joint venture (JV) between the Lohia group and UM Motorcycles, an American company, which had surreptitiously folded up its operations and closed its warehouse for spare parts within three years after setting up the JV. 
     
    In a statement, FADA says "Auto manufacturer’s shutting shops and exiting India overnight now brings a strong urge to introduce franchisee protection act to safeguard interests of customers, dealers and employees since India aspires to make the country a manufacturing hub with an aim of Make in India."
     
    FADA, which has taken up the cause of the dealers of ‘UM Motorcycles’, whose motorcycles were manufactured and sold in India by had also requested several ministries like the ministry of heavy industries, road transport & highways, commerce & industries and corporate affairs to intervene in the matter.
     
    In October this year, FADA had sent a legal notice to UM Lohia for defrauding dealers. "...to protect the interests of the customers and the dealers, FADA, through its counsel Khaitan & Co, has issued a legal notice to UM Lohia and its management, calling upon them to redress all grievances of dealers relating to the losses suffered by dealers due to actions of UM Lohia and to take steps to ensure the maintenance and servicing of motorcycles already sold in accordance with the warranty terms and law," the national body of automobile retail industry had said at that time. (Read: FADA Sends Legal Notice to UM Lohia and Promoters for Defrauding Dealers)
     
    However, FADA says it did not receive any response from UM Lohia as well as promoters and management of the company.  
     
    In a statement, the dealers association says, "Looking at the plight of the customers who are not getting proper service and spares because of carelessness of the owners and dealers who are aggrieved by the dishonesty and fraud on part of the management and promoters of UM Lohia, including founders Ayush Kumar Lohia and Jose Miguel Villegas, FADA has taken up this issue and is requesting intervention of the PMO and allied ministries."
     
    "Due to the plagued relationship between the owners, it has caused huge losses to dealers and has exposed them to unwarranted litigation from customers for whom, dealers are the face of the company. Apart from the business losses which the dealers are facing with, it has also resulted in creating a bad name in their society and has therefore added to their plight and mental harassment," FADA added.
     
    In 2016, the Lohia group has set up the JV with UM Motorcycles to manufacture and sell in India ‘American’ style motorcycles under the brand of ‘UM Motorcycles’.    
     
    According to FADA, the woes of dealers began the moment the JV entered the market with its motorcycles. "It soon came to light that the so called ‘American’ motorcycles were actually being assembled from Chinese parts at UM Lohia’s manufacturing plant at Kashipur in Uttar Pradesh. Consumer interest immediately dipped as no one wanted to purchase cheap Chinese replicas of ‘American’ motorcycles. The brand lost its value, and with it the investments of dealers, who were now holding a product few desired."
     
     
    According to FADA, at a time when the entire automobile industry in India was moving towards BS-IV emission standards, UM Lohia chose to enter the market by introducing BS-III motorcycles in the second half of 2016, even though the ban on sale of BS-III vehicles was to take effect in a few months from April 2017. As soon as the ban on BS-III vehicles came into effect, the dealers of UM Lohia were left with a huge inventory of BS-III motorcycles which was not only undesired by customers but now also legally unsellable.
     
    UM Lohia, however, refused to compensate dealers for this unsellable stock and also refused to return the advance payments given by many dealers.
     
    "It is only after much cajoling that UM Lohia even acknowledged the problem. Even then, instead of buying back the BS-III motorcycles from the dealers and returning their advances, UM Lohia came up with the scheme to sell BS-IV motorcycles to dealers in lieu of their stock of BS-III motorcycles and advances. However, the BS-IV motorcycles supplied by UM Lohia were entirely unfit to ply on roads with several basic components such as EFI module controller and gear breaking down within few days of use of the motorcycles by the customers," FADA says.
     
    To make matters worse, FADA says, UM Lohia has now surreptitiously folded up its operations and closed its warehouse for spare parts. This makes it impossible for dealers to service the warranty claims on defective UM motorcycles. As a result, many dealers have been exposed to litigation from customers of UM motorcycles.
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    User

    COMMENTS

    Dr.Dhananjaya Bhupathi

    1 week ago

    https://www.moneylife.in/article/um-lohia-fada-seeks-pmo-intervention-to-stop-the-jv-companys-exit-from-india/58812.html
    1. It is fine. Moneylife is expected to contact JM Company’s representative[s] in India; so that the news article is comprehensive.
    2. https://www.youtube.com/watch?v=4Si8U02s8cQ.
    3. SATYAMAEVA JAYATHE!!!

    Nakul Kumar Reddy

    1 week ago

    Who the hell is he (China team),to tell about this issue .
    Fraud people ,they looting public money.
    Need to file more cases , under non bailable sections.

    Slowdown, soft commodity prices dent India Inc's Q2 revenue growth
    Weak consumer sentiments along with slowdown in the infrastructure sector and soft commodity prices weighed heavily on the corporate sector's revenue growth in Q2FY20, ratings agency ICRA said here on Monday.
     
    The ratings agency's analysis of 609 companies, excluding the financial sector entities, showed a YoY and sequential contraction in revenues for the "first time in almost four years" with an aggregate revenues contracting by 0.9 per cent YoY. 
     
    ICRA said during the period under review Ebitda (earnings before interest, taxes, depreciation and amortisation) margin contracted 32bps YoY and by 100bps sequentially to 16.7 per cent. 
     
    "The major impact on revenues came from commodity-linked sectors, revenues from which contracted 5 per cent YoY as well as sequentially," the agency said. 
     
    "Consumer sentiment too remained muted, as reflected in YoY contraction of 1 per cent in revenues from consumer-oriented sectors. Additionally, demand from the infrastructure segment was down, due to extended monsoon, slow release of government funds, cancellation of orders and marginal decline in housing demand," it said.
     
    The analysis revealed that profitability was impacted by negative operating leverage, high discounting and tepid realisation in commodity sectors.
     
    "In terms of sector specific trends, consumer-linked sectors, like automobiles and FMCG, continued to report YoY and sequential weakening. Within the automobile sector, the passenger vehicle segment, which had started weakening from Q2FY19 as ownership costs increased and the macroeconomic environment weakened, continued sluggish," it said.
     
    "Although FMCG companies reported volume growth, there was further sequential slowdown in both rural and urban markets."
     
    As per the statement, cement production volume growth also slowed significantly to 1 per cent, given the continued slowdown in infrastructure, housing and industrial or commercial sectors. 
     
    The IT sector reported 9 per cent revenue growth in Q2FY20 (in rupee terms), supported by inorganic growth, rupee depreciation YoY and traction in digital offerings across verticals, while the gems and jewellery segment grew 22 per cent on the back of increase in gold prices. 
     
    Additionally, sectors like airlines, pharmaceutical and telecom helped arrest the extent of revenue contraction.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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