The board of Cox & Kings Ltd. yesterday approved the demerger of its foreign exchange division into a separate financial services company to be named Cox & Kings Financial Service Ltd. (CKFSL). The demerger is effective April 1, 2017, and is subject to high court and other regulatory approvals.
“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,”Peter Kerkar, Chief Executive Officer, Cox & Kings Group, said.
The Forex business has 125 licenses across India to provide foreign exchange to captive customers as well as to third-party customers. According to the company, the working capital needs of the Forex Business are quite different from those of the Tours & Travels business. With a view to enable the Forex business to capitalize on growth opportunities in an independent manner it has been decided to demerge the business into a separate company.
The demerged entity has the potential to grow substantially as a standalone business with separate financing and operations and focused leadership and management attention. The opportunities as well as risks and competitive environment within the Forex Business are distinct and the said business is capable of attracting its own set of investors and strategic partners, lenders and other stakeholders.
CKFSL is also in the process of applying for a license to operate as a non-banking finance company (NBFC) and will add multiple product lines to its suite of offerings over time, including holiday finance, overseas student finance etc. aimed primarily at the travel and tourism sector.
