NEW DELHI: The board of Cox & Kings Ltd (C&K) has approved the demerger of its foreign exchange division into a separate financial services company to be named Cox & Kings Financial Service Ltd. (CKFSL). The demerger will be effective from April 1, 2017, and is subject to High Court and other regulatory approvals, the company said.
"CKFSL is also in the process of applying for a license to operate as a non-banking finance company (NBFC) and will add multiple product lines to its suite of offerings over time, including holiday finance, overseas student finance etc. aimed primarily at the travel and tourism sector. With the number of outbound travellers from India due to touch 50 million by 2020 from approximately 21 million currently, there is a substantial and unique opportunity for the newly minted company to grow rapidly at high rates of profitability," the company said.
"Whilst the Tours & Travels and Foreign Exchange ('Forex') businesses are complementary in nature, the businesses operate quite distinctly from each other. The Forex business has 125 licenses across India to provide foreign exchange to captive customers as well as to third-party customers," it added.
Peter Kerkar, CEO of Cox & Kings Group, said, "Strong macro drivers coupled with a strategic brand presence will enable CKFSL to flourish. There are abundant, large-sized avenues for natural product diversification and the timing of this demerger is most opportune."
The working capital needs of the Forex Business are quite different from those of the tours and travels business. With a view to enable the Forex business to capitalize on growth opportunities in an independent manner, C&K has been decided to demerge the business into a separate company.
Source: timesofindia.indiatimes.com