Mumbai: Leisure and education travel group Cox and Kings (CKL) today said it will demerge its foreign exchange division into a separate financial services entity - Cox and Kings Financial Service (CKFSL).
The company's board has approved the demerger, which is effective April 1, 2017, and is subject to High Court and other regulatory approvals, CKL said in a release. Whilst the tours and travels and foreign exchange (Forex) businesses are complementary in nature, the businesses operate quite distinctly from each other, the company said.
It said, the forex business has 125 licenses across India to provide foreign exchange to captive customers as well as to third-party customers. "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," said Cox and Kings Group Chief Executive Officer Peter Kerkar.
It was proposed that the forex business of the company be demerged and transferred to the resulting company, a wholly-owned subsidiary of Cox and Kings, so that it maximizes value for all the stakeholders.
The equity shares of CKFSL will be issued to the equity shareholders of Cox and Kings.
CKFSL is also in the process of applying for a license to operate as a non-banking finance company and will add multiple product lines to its suite of offerings over time, including holiday finance, overseas student finance among others aimed primarily at the travel and tourism sector.
