Crisil reaffirms Thomas Cook ratings on business recovery
Jun 21, 2021
Mumbai (Maharashtra) [India], June 21 : Crisil has reaffirmed its ratings assigned to bank facilities, debt programmes and corporate credit rating of Thomas Cook India at A-plus/CCR A-plus/negative/A1/stable.
The reaffirmation reflects the strong parent support from Fairfax Financial Holdings Ltd, healthy liquidity in the form of cash and cash equivalents against limited external debt supporting the capital structure.
Further, the company's net debt continues to be negative. The ratings also factor in the Thomas Cook India Group's dominant position in the foreign exchange business and strong brand equity in travel-related services.
The company said on Monday it has witnessed sequential business recovery during the last nine months of fiscal 2021 which along with continued cost reduction measures (total cost savings of more than Rs 650 crore in fiscal 2021) has resulted in sequential reduction in operating losses.
Besides, Thomas Cook India had received significant fund infusion from its parent Fairfax in March, including Rs 436 crore of optionally convertible cumulative redeemable preference shares.
The fund infusion mitigated impact of operating losses during the previous fiscal and provided necessary support to TCIL's liquidity.
Managing Director Madhavan Menon said vaccine drives and easing of travel restrictions around the world will help accelerate the pace of business recovery. "We will continue to focus on innovation and digitisation as we build momentum towards recovery."
