FROM RICHES TO RAG STORY- COX AND

KINGS

Cox & Kings Ltd., set up in 1758, is one of the longest established travel companies.
Headquartered in India and the UK, the holiday and education travel group has subsidiaries in
the United States, Canada, The United Kingdom, Netherlands, the United Arab
Emirates, Japan, Singapore, Australia and New Zealand. Cox & Kings Ltd. has operations
spread across 22 countries and 4 continents.

The various services offered by Cox & Kings Ltd. are Leisure Travel - Domestic (Bharat
Deko), Duniya Deko (escorted overseas tours), FlexiHols (customised overseas tours),
Inbound and International, NRI (catering to Indians across the world), Corporate
Travel, Meetings, incentives, conferencing, exhibitions (MICE), Trade Fairs, Visa
Processing, Foreign Exchange and Luxury Escapades (unique and luxurious travel).

Leisure India

 Bharat Deko: Cox & Kings Ltd, through its brand 'Bharat Deko', offers its domestic
packages. It also offers a range of products such as religious tours, education tours, spa
holidays, budget holidays, summer and beach retreats, rail holidays etc.
 Inbound: Apart from domestic tourism, Cox & Kings Ltd. also offers various travel
services to inbound tourists, such as, hotel bookings, air/rail ticketing, roundtrip, airport
transfer, land arrangements, excursion planning, event planning, meetings and
appointment and private air charter among others.
 Outbound Tours: The company has a wide range of package tours for overseas
travellers.

Cox & Kings Ltd. operates Leisure International through its subsidiaries in
the UK, Dubai, Japan, Australia, New Zealand, United Arab Emirates, United States, the
Netherlands, Singapore and Canada.

Since 2016, Cox & Kings Ltd. has been consistently adding products that cater to niche
audiences. Some of these include Trip 360º (adventure trips), Getaway Goddess (women-only
tours), Tour to Feast (culinary holidays) and Enable Travel (holidays for the disabled).
Operations- Cox & Kings Ltd. operates its leisure travel business in India and across 17
international locations. In India, it distributes its products and services through 241 points of
presence covering 149 cities comprising 12 branch sales offices, 143 franchisee sales shops,
and 86 agents as of September 2018.

HISTORY

Cox & Kings opened a USA office in June 1988 in New York, NY, then moved the USA
office to Tampa, Florida.

Cox & Kings Travel Ltd., UK, a wholly owned subsidiary of Cox & Kings (UK) Ltd., is an
outbound specialist tour operator and caters to the leisure travel market in Europe. Cox &
Kings Ltd. (UK) holds 100% of Cox & Kings Travel Ltd. The latter is a dedicated wholesaler
of products and services to other tour operators. It also offers ground handling capabilities in
select geographies. Cox & Kings Travel Ltd. also holds 100% of East India Travel Company,
Inc., a US-based subsidiary of the company. East India Travel Company, Inc. is in the
business of selling upmarket tour and travel packages in the US.

In August 2009, Cox & Kings USA came under the umbrella brand of East India Travel
Company, a subsidiary of Cox & Kings Ltd, the global parent company. In October 2010,
Cox & Kings USA was rebranded Cox & Kings, The Americas, and became responsible for
all sales in North and South America. Cox & Kings, The Americas relocated from Tampa
to Los Angeles, California in May 2011.

In January 2010, Cox & Kings acquired Tempo Holidays, a wholesale travel company based
in Melbourne, Australia for an undisclosed sum, rumoured to be in the vicinity of US$25
million, and trades under that brand.[4] In January 2010, it also acquired Bentours (based
in Sydney, Australia) from the German giant TUI Travel. Bentours also continues to trade
under its brand name.

In 2014, Cox & Kings group sold Camping unit for GBP 89 million. On 2 June 2014, Cox &
Kings announced the sale of the camping division of its subsidiary Holiday break, to France's
Homair Vacances, for 892 crores.

In October 2015, Cox & Kings Group acquired 100% of the issued and outstanding shares of
Late Rooms Ltd (UK) (‘Late Rooms’) for GBP 8.5 million.
Late Rooms is an online hotel booking specialist in the UK. It offers a range of
accommodation options with over 54,800 properties globally, which can be booked up to a
year in advance.

In December 2015, it also sold 100% of the issued and outstanding shares of Explore
Worldwide Limited for GBP 25.8 million to Hotel plan UK Group.

In March 2016, it sold 100% of Late Rooms Ltd (UK) (‘Late Rooms’) to Enterprises UK Ltd.
(‘Malvern’) for GBP 20 million. Cox & Kings' 65.58%-owned subsidiary, Holiday break
Ltd. (‘Holiday break’), sold 100% of its Super break business to Malvern for a net
consideration of GBP 9.25 million.

In August 2019, Cox & Kings stated that it would be unable to declare its financial results for
the first quarter of the year [8]. This announcement came following news of a liquidity crunch
being faced by the company, beginning with loan defaults on commercial papers, which then
led to a sharp decline in the company's stock.

ABOUT THE CRISIS:

Cox and Kings are “ cash -strapped” on the grounds of being negligent towards the debt
accumulated amounting to Rs. 325 crore, for which the default in the payment has been
approximately four times in three weeks. The investors have officially cancelled the part of
the promoters’ shares in the company pledges against loans. The company’s stock has been
battered on the markets and has been downgraded by the agencies responsible for rating.

The rise of their downfall was due to the following events-

1. The company revenue growth had been a compounded annual rate of negative 8% to
Rs 5,693 crore and their debt-equity has risen to 0.76 in financial year 2019, to 0.35 in
FY16.
2. The default in payment of RS. 150 crore on it’s unsecured commerical papers which
further risked the company’s reputation.
3. The high share pledge by promoters which is more than half of their 49% stake in the
company, reasons undeclared.
4. Lastly, the lack of clarity in the rising receivables of the company along with delay in
receivables from the group companies is an ongoing unresolved concern.
When asked, the investors have said that there has been a tarnishing effect to the entire
industry just because of what has happened to one industry.
As per the reports, Cox and Kings failed to repay debt on time a second time in less than a
week as the tour operator faces a cash crunch.

The defaults-

 The company defaulted on Rs 50 crore worth of unsecured commercial paper

repayment to two investors due on June 28, Of the Rs 65-crore payable, it was
capable of paying off 15 crore.
 Cox & Kings faced a cash-flow mismatch, as a result of further aggravating the
default in payments and low ratings.
 Since the company failed to repay Rs. 150 crore due on June 26, the CARE Ratings
and Brickworks Ratings greatly lowered the company’s ratings by several notches
 In addition to it’s previous defaults the company has not yet responded to Bloomberg
Quint’s queries on it’s cash balance which sums to Rs. 1800 crore, which makes it
suspicious on the grounds of default in loan repayments.

However, according to the company its working capital was stretched and further aggravated
because of its inability to replace short-term loans with long-term debt. The company
promises that it is taking all required measures to resolve the cash flow mismatch which is
temporary in nature. While evaluating operational performance, the company said it’s also
approaching lenders to work out some time-bound programme to meet this emergency.
DATA ANALYSIS OF COX & KINGS

 Balance Sheet (FY15-FY19)

 P&L (FY15-FY19)
 Cash Flow (FY14-FY19)

 Cox& Kings debt structure

 We can see a that Cox and Kings gradually shifter from long-term debt to short-term debts
 This resulted in increased and higher interest rates and expenses.
CURRENT SITUATION

Ebix has acquired the corporate travel business from Cox & Kings for an undisclosed
sum. Ebix announced the transaction couple of days ago.. This is the firm’s second
acquisition in recent months, after its purchase of Yatra.com. The firm said it has signed a
deal with Cox & Kings to transfer its business travel agreements to the EbixCash’s Mercury
Travel division.

Meanwhile, the company’s auditor, DTS & Associates, also resigned, citing delays in
finalisation of the first quarter result. The International Air Transport Association (IATA)
terminated its licence. The firm has delayed salaries and defaulted on loan and vendor
payments over the past few months. Earlier, the IATA had refused to let Cox & Kings issue
tickets on credit, making servicing of corporate customers difficult. The tour operator has
also been forced to close down its business units in Australia and New Zealand.

“Under the agreement, key employees of Cox & Kings will be transferred to
the EbixCash payroll, with immediate effect. This transfer agreement is part of EbixCash’s
efforts to double its revenues from the corporate travel sector by the end of this financial
year, from the previous year,” said Ebix.