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Thomas Cook unveils rights issue plan

Mumbai, Aug. 27: Thomas Cook (India) Ltd, the travel and financial service provider, today announced plans for a Rs 200-crore rights issue.

In a statement to the stock exchanges, the company said its board of directors had given an in-principle approval to the rights issue at a meeting today.

Proceeds from the issue will be used for redemption of the preference shares of Rs 105 crore and the balance will be used for repayment of existing debt.

The company did not elaborate further on the redemption of the preference shares.

According to Madhavan Menon, managing director of Thomas Cook (India) Ltd, “The rights issue will help us revamp our capital structure and prepare us for the next stage of growth.”

Thomas Cook said the ratio and the price of the issue had not yet been decided and will be announced later.

In March last year, the company had decided to issue shares on a rights basis in the ratio of one equity share for every three shares held.

While the issue size was up to Rs 225 crore, in October 2007, the company informed the stock exchanges that the rights issue would be deferred till further notice.

The announcement of the rights issue today saw the Thomas Cook share spurting by over 15 per cent on the bourses. On the Bombay Stock Exchange, the share closed at Rs 98.85, up 15.21 from the previous close.

In June this year, UK-based Thomas Cook Group’s open offer for a 20 per cent stake in the domestic travel firm received an acceptance ratio of 100 per cent.

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