Cox & Kings sells camping business to Homair Vacanes for Rs892 crore

Holiday-maker Cox & Kings has sold its camping business for £89.2 million or Rs892 crore to French firm Homair Vacanes as part of its restructuring strategy.

The unit, a part of UK-based Holidaybreak, was acquired by  Cox & Kings in 2011, the biggest overseas acquisition by an Indian travel firm.

The sale of the profitable camping division, inked by merger advisory firm Lincoln International would be expected to be completed in three months, according to Cox & Kings director Peter Kerkar.

The rationale for the sale of one of its portfolios, according to Kerkar, was that the company realised that the camping business, which was operational only five months a year, did not have synergies with Cox & Kings. Also camping holidays were not very popular with Indians.

The deal would also help the 256-year-old company cut Rs4,200-crore debt, which swelled mainly because of the ambitious Holidaybreak acquisition. Holidaybreak, which is big into education tours, contributed 66 per cent to Cox & Kings' Rs2,308 crore revenues in FY 14.

The agreement would see Homair Vacanes that outpaced seven other bidders to acquire the camping division, pay £85.5 million in cash on completion of the transaction and the balance when the buyer got back a tax refund.

The camping unit, with operating profit of £17 million, offers family holidays at over 170 third-party owned campsites across 12 European countries.

According to Kerkar, the sale was consistent with the company's strategy of becoming a leisure and education travel group and allowed it to focus on these businesses that had a global footprint and market leadership position, PTI reported.

Homair Vacances chairman of the Management Board, Alain Calme said the acquisition was a major development for Homair Vacances. He added the company would develop the brand by respecting its DNA, as it had done with other acquisitions, PTI reported.