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EXCLUSIVE-UPDATE 1-UK travel firm Cox & Kings plans Indian IPO

Published 06/19/2009, 11:20 AM
Updated 06/19/2009, 11:25 AM
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* Cox & Kings plans flotation on Bombay Stock Exchange

* Says plans to raise about $100m through IPO

* Company to be valued at about $400m

* Expects placing to be over-subscribed

* Proceeds to fund acquisitions, pay down debt (Adds further detail, CEO quotes)

By Phakamisa Ndzamela and Matt Scuffham

PEWSEY, England, June 19 (Reuters) - Venerable 250-year-old British travel firm Cox & Kings is planning an IPO on the Bombay Stock Exchange in September, reflecting its desire to expand in the burgeoning Indian holiday market.

Chairman Anthony Good told Reuters on Friday the company will issue shares equivalent to about 25 percent of the business, and expects to raise about $100 million, giving it a market valuation of about $400 million.

The upmarket holiday firm has had a presence in India since 1758, when it was founded by Richard Cox as a bank for army officers serving in the country.

The decision to float on the Bombay Stock Exchange was made after its Indian subsidiary outgrew its other businesses, Cox & Kings said.

"India is so far on the way forward that it's the Indian company that has ended up as the parent," said Good, who has been chairman of Cox & Kings since 1975.

He added that the company's high profile in India was a factor in the decision to IPO there.

"The Indian market is certainly going to be more receptive," he said.

Good said he expects the number of Indians holidaying with Cox & Kings to rise to 500,000 annually by 2010.

"It's a reflection of the growth in the affluent middle classes, mainly based in the major Indian cities," Good said.

India's holiday market has also been identified by major operators such as TUI Travel Plc, Thomas Cook Plc, and Kuoni AG as a key growth area.

Cox & Kings currently has 79 outlets in India and Good said it is "not unrealistic" to expect that to rise to around 200 in the two to three years following the flotation.

Good said the general election victory by the Congress-led coalition in May had been a factor behind the decision to seek an IPO in India now after the company had postponed plans to list in Mumbai last year due to political uncertainty.

"The election results created a totally new and much more stable, growth-orientated situation in India," he said.

Good said he expected investor appetite for the placing to be strong.

"I'd be surprised if the issue would not be oversubscribed," he said.

The proceeds from the flotation will be used to make acquisitions and to pay down the company's debt, which stands at more than $11 million, Good said.

Cox & Kings' Indian operations achieved revenues of around 740 million rupees ($26.18 million) in 2008. The firm provided holidays for about 287,000 Indians in 2008, compared to 16,500 holidaymakers from Britain.

The family of Chief Executive Peter Kerkar will retain a majority shareholding of over 50 percent following the IPO. Good, who will remain group chairman, currently has a 10 percent stake and will be not selling any shares.

($1=28.27 Rupee) (Writing by Rosalba O'Brien; Editing by David Jones)

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