TCIL has signed an agreement with AlixPartners, Thomas Cook UK’s appointed Special Managers in this regard.
Chennai: Travel service provider Thomas Cook India (TCIL) will be acquiring rights to use the iconic brand in India as well as Sri Lanka and Mauritius for a one-time payment of Rs 13.9 crore.
TCIL has signed an agreement with AlixPartners, Thomas Cook UK’s appointed Special Managers in this regard. TCIL has been in talks with the liquidator of its UK namesake as it has the right to use the brand in India only till 2024. Now on, TCIL can use rights in perpetuity on a royalty-free basis. TCIL was previously paying an annual brand licence fee of Rs 2 crore to TCUK, the company informed the stock exchanges.
“In 2012 when TCIL were acquired by Fairfax Financial Holdings of Canada, we had entered into a Brand Licence Agreement with the erstwhile Thomas Cook Group of the UK to give us exclusive use of the brand until 2024 across India, Sri Lanka and Mauritius for an annual licence fee of Rs 2 crore. So when this very attractive investment opportunity of complete ownership of the brand name across these markets, for a onetime payment of Rs 13.9 crore came up, it truly was an opportunity we had to grab!”, Madhavan Menon, Chair-man & Managing Director, Thomas Cook (India) said.
This move by TCIL also prevents possible new entrants into these markets, using the brand name after 2024. “We had two options. We could either get the brand forever from the liquidator or go for a new brand after the tenure to use the current one ceases,” said Rajeev Kale, President and Country Head – Holidays, MICE, Visa, Thomas Cook India. Building a new brand would have been an arduous and expensive task for the company.
In addition to Thomas Cook, the Thomas Cook India Group operates leading B2C and B2B travel brands including SOTC, TCI, SITA, Asian Trails, Allied T Pro (ATP), Austra-lian Tours Management (ATM), Desert Adventures, Luxe Asia, Kuoni Hong Kong, TC Travel, Private Safaris East & South Africa, Sterling Holidays and Digiphoto Entertainment Imaging (DEI), with strategic investments in Ithaka by Travel Junkie Solutions.
Unlike it UK namesake, which has gone into liquidation, TCIL is financially strong. It has operations in 29 countries and five continents, a team of over 9,700 and had combined revenue in excess of Rs 6718.7 crore for 2018-19.
It has cash and bank deposits balances of Rs. 1088 crore as of September 30, 2019. On a standalone basis Thomas Cook India is debt-free and the group generates an average annual free cash flow of around Rs 200 crore.