Thomas Cook board approves Rs 150 cr buyback scheme
Thomas Cook (India) board has approved buyback of up to 26,086,956 fully paid up shares at a price of Rs 57.50 per share for a maximum aggregate amount of Rs 150 crore.
Thomas Cook (India) on Wednesday said its board has approved buyback of up to 26,086,956 fully paid up shares at a price of Rs 57.50 per share for a maximum aggregate amount of Rs 150 crore.
The buyback price per share of Rs 57.50 is at a premium of 40 per cent over the closing market price of the shares as on the date immediately preceding the date of the intimation of the board meeting, Thomas Cook (India) said in a regulatory filing.
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The buyback record date has been fixed as March 7, 2020 and the transaction will be entirely funded by internal accruals, it added.
"The buyback scheme is primarily intended to increase shareholder value as the income arising to the shareholder on account of buyback of shares is exempt from tax," Thomas Cook (India) Ltd Chairman & Managing Director Madhavan Menon said.
The buyback will signal confidence to company's shareholders and unlock the underlying value of the diversified Thomas Cook India Group, he added.
"The combined impact of a sluggish economy and difficult trading conditions due to the prolonged direct impact of the coronavirus have resulted in slowing demand across our businesses. Given that this coincides with the peak booking season for the summer vacations, we anticipate a cascading negative impact on our results," Menon noted.
That said, the company is confident that its strong fundamentals and financial position will see it through the current challenging environment, he added.
"We are focussed on taking all necessary measures to ensure our sustainability and long term growth," Menon said.
Thomas Cook (India) shares on Wednesday ended 9.96 per cent down at Rs 50.20 apiece on the BSE.
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