The board of Thomas Cook to consider buyback of its shares in a meeting scheduled on February 26th.
The consolidated equity attributable to Thomas Cook owners as on September 29 is Rs 8,900 crore. Their total borrowings are just around Rs 321 crore and the third quarter press release indicates that the cash on the company’s books is close to Rs 1,400 crore, reports CNBC-TV18.
So if one were to go by the conventional wisdom of the buyback norms, 10 percent approval of this owners’ equity of Rs 8900 crore would mean around Rs 890 crore. But would they go for 25 percent buyback - it looks unlikely because they do not have the cash and moreover, the marketcap of the company has come down on account of the restructuring that took place.
So, one needs to know what is the attributable equity now that the restructuring has taken place because the company’s last balancesheet was on September and out there the total equity was close to around Rs 8,900 crores and ha that number changed or not, is the big question.
However, as on December 31, they are sitting on Rs 1,400 crore of cash as on December 31 and the marketcap of the company is Rs 1,780 crore.
The street will also be watching out for whether the promoters participate in this buyback or not. They may, given the fact that they have 65.6 percent stake in the company.
The stock was locked in upper circuit because buybacks do spur investor interest and also because of cash on their books.