Shares of travel and tour operator Cox & Kings tanked 4.9% on Tuesday to touch its 52-week low of ₹32.95 on the BSE after the company defaulted on yet another tranche of commercial paper on Monday, after last week’s default, leading to a downgrade by rating agencies.
The company had defaulted on the payment of ₹50 crore out of the ₹65-crore worth commercial paper maturing on Monday. This led Care Ratings to downgrade various instruments of the company.
Care has downgraded Cox & Kings’ bank facilities of ₹1,760 crore to BB stable from AA stable, non-convertible debentures (NCDs) worth ₹525 crore to BB stable from AA stable and commercial papers worth ₹375 crore and ₹1,685 crore to Care D and Care A4 respectively from Care A1+, said Care Ratings in a statement.
“The working capital situation at Cox & Kings got stretched in the last few months and was further impacted due to its inability to replace the short-term loans with long term loans/regular working capital lines,” Cox and Kings said in statement, adding that the company was taking all required measures to resolve the temporary cash flow mismatch.
“It is evaluating each business and identifying ways to improve operational performance.
“The company is focusing on cash flow generation from each business and working at the highest priority to free working capital. The company will be approaching its lenders to work out some time-bound programme to meet this emergency,”it said.
Last week, Cox & Kings had failed to meet a debt repayment obligation towards maturity of unsecured commercial papers on June 26. Out of an aggregate amount of ₹200 crore, the company managed to pay ₹50 crore while the balance ₹150 crore remained unpaid.
