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Cox & Kings hits lower circuit for 12th straight day on another CP default

SI Reporter/Mumbai 11 Jul 19 | 10:17 AM

Shares of Cox & Kings were locked in lower circuit for twelfth straight trading day, down 5 per cent at Rs 23, in intra-day trade on the BSE on Thursday after the company defaulted on commercial paper of Rs 125 crore. This is the company's third default in the past fortnight, totaling Rs 325 crore.

The stock was trading at a new low, and has tanked 54 per cent from the level of Rs 50 on June 25. In comparison, the S&P BSE Sensex dipped 2 per cent during the same period.

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Rating agency CARE Ratings revised Cox & King’s long-term bank facilities of Rs 1,760 crore to 'CARE D' from 'CARE C'. "The revision in ratings assigned to Cox and Kings takes into account default in CP (carved out) redemption due on July 9 and overdues in bank accounts," it said.

Cox & Kings, in a regulatory filing on Wednesday after market hours, said that Sneh Sadan Traders and Agents had invoked 349,602 of the company's equity shares (representing 0.18 percent of total paid-up equity) of Rs 5 each on June 10.

The invocation of pledge could be due to a sharp fall in the share price. The stock has plunged 86 percent in the last four months.

“The promoters’ holding in Cox & Kings is 49.8 per cent as of end of March 2019 of which 63.28 per cent shares are pledged as of March 2019. Cox & Kings’ share price has also declined significantly thus curtailing the company’s financial flexibility to large extent," CARE Ratings said.

In a separate filing, the tour operator said it was working closely with its lenders to optimise its strong asset base globally and bring the situation back to normal as soon as possible.

The tour operator has been facing a cash crunch resulting in delays in salaries and vendor payments. The International Air Transport Association has suspended the company from selling tickets on credit as it reviews its credit worthiness.

Till 10:13 am, a combined 21,670 shares changed hands on the NSE and BSE. There were pending sell orders for 6.52 million, representing 3.7 per cent of the company's total equity, on both the exchanges.

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