Cox & Kings defaults on repayments on commercial papers fourth time in three weeks; shares at record low

New Delhi: Cox & Kings (India) Ltd., has defaulted on its repayment obligations on commercial papers worth Rs 45 crore, while interest of Rs 41 lakh could not be paid timely on bonds worth Rs 50 crore, said the travel and tours company on Tuesday. This is the fourth Cox & Kings default in three weeks. [caption id=“attachment_6013191” align=“alignleft” width=“380”]  Representational image. Reuters.[/caption] This is the fourth Cox & Kings default in three weeks. In a regulatory filing on Tuesday, the company said that it has defaulted on payment on unsecured commercial papers worth Rs 45 crore on 16 July, 2019. “The company is working closely with its lenders to optimise its strong asset base globally and bring the situation back to normal as soon as possible,” Cox & Kings said in the filing. On 15 July 2019, the company defaulted towards paying interest of more than Rs 41 lakh during 15 June to 15 July 2019, on secured redeemable non-convertible debentures worth Rs 50 crore, Cox & Kings said in another filing. These NCDs carried a tenure of 24 months at a coupon of 10 percent per annum payable per month.

“Whilst the company was making all efforts to make the interest payment on time, the same could not be paid due to cash flow mismatch. The company proposes to meet its obligations through a combination of internal accruals and monetisation of assets. The company is working towards plans to make good its obligations,” it said in the filing.

The first Cox & Kings default on commercial papers worth Rs 150 crore was declared on 27 June 2019, a day after the date of actual default. The second default was made public on 29 June after it failed to make repayments against commercial papers worth Rs 50 crore. The actual default, however, happened on 28 June 2019. On 1 July, Cox & Kings said that company’s working capital situation was stretched in the last few months, which was further aggravated due to its inability to replace the short-term loans with long term loans or regular working capital lines. Cox & Kings “is evaluating each business, 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. On Tuesday, Cox & Kings shares fell 4.77 percent to Rs 19.95 apiece on the BSE while the benchmark Sensex gained 0.60 percent to end the day at 39,131.04 points.