INSUBCONTINENT EXCLUSIVE:
90 per cent this year after the company took on debt that could not be serviced on time due to cash-flow mismatches.
But analysts are
pointing to a bloated balance sheet for the precipitate stock decline even as investors sought to involve regulators to probe, what they
Financial Services has also remained elusive, with the stock falling 97 per cent from ?72 on January 1 to ?2.49 last Friday.
Cox and Kings
has defaulted on three of its commercial paper offerings in just two months despite having cash and cash equivalent of ?1,890 crore on its
consolidated balance sheet and ?723 crore on a standalone basis, as on March 31, 2019.
This came as a big surprise to investors and analysts
its commercial paper offerings in just two months despite having cash and cash equivalent of ?1,890 cr on its consolidated balance sheet
Cox - Kings told ET that it has since repaid certain credit facilities and its working capital position was stretched in the first quarter
of FY20, resulting in a cash-flow mismatch due to which the company could not repay commercial papers due end-June.
Investors and analysts
Some investors in a letter to the Special Fraud Investigation Office (SFIO) and market regulator Sebi last week alleged that the promoter
education business to Midlothian Capital Partners
transactions, the company diverted from its guidance of using entire sales proceeds toward debt repayment and reduced debt only by ?1,350
reduction in debt and was disclosed in the annual report of the year in which the businesses were sold
The company is yet to publish the balance sheet for FY19.
Additionally, trade receivable levels of FY18, which were guided to be the peak,
Rather, they have increased from ?1,982 crore as on March 31, 2018, to ?2,418 crore on March 31, 2019
the company said there has been a delay in collecting receivables given the tight liquidity situation in India.
Another point is that 70 per
cent of promoter holding was pledged as of June 30, 2019
Promoter entity Sneh Sadan Traders and Agents has availed debt of ?944 crore against its paid-up capital of ?9 lakh and is learnt to have
pledged Cox - Kings shares as collateral for this loan
Analysts have blamed the plunge in stock prices to non-repayment of debt taken by promoter entities.
Regarding a loan of ?1,339 crore
availed from Yes Bank in August 2018, the company said that Prometheon Enterprise, a UK-based 100 per cent subsidiary of the company,
availed a credit facility in 2012
This credit facility had been refinanced in March 2018, and the Yes Bank loan availed in August 2018 is not a new loan
However, Cox - Kings agreed that it has borrowed ?211 crore from Axis Bank in September 2018 and ?175 crore from Bank of Baroda in December
2018 for working capital despite having over ?700 crore cash - cash equivalent.
