A new dawn – Cox & Kings UK rescued from the flames
By Bruce Piper
“Stunned disbelief” would have to be one of the most common reactions among the Australian travel industry to the recent news that Cox & Kings UK was being taken over by Abercrombie & Kent. Several travelBulletin readers were quite vocal when the deal was mooted, with the UK operations of Cox & Kings seemingly magically isolated from the huge financial crisis at the company’s Indian parent company which had just a month or so before seen the collapse of Tempo Holidays and Bentours in Australia.
In fact a brief reference in Travel Daily in late November linking Cox & Kings UK to the failure of its sister businesses in Australia, New Zealand and the USA brought a swift reaction from London. “We are a separate business to Cox & Kings India and Cox & Kings Americas, and have been completely unaffected. It’s very much business as usual here in the UK,” insisted the company’s UK PR manager, in an urgent request for a retraction. The British protestations sounded very similar to statements issued by Tempo Holidays just a few days before the company was placed into administration, leading to the loss of about 100 jobs and disrupting the travel plans of thousands of Aussies and Kiwis – not to mention costing suppliers and agency groups millions of dollars.
Those who had delved into the collapse of Bentours and Tempo were particularly bemused at the claims of separation. The truth of the matter is that the business in the UK had exactly the same parent company as Tempo Holidays and Bentours.
The most recent accounts for Cox & Kings UK note that its shares are 100% owned by Prometheon Enterprise Limited, and “the ultimate controlling party is Cox and Kings Limited, a company incorporated in India”.
During the recent creditors’ meeting for C&K India’s Australasian business, Tempo Holidays Pty Limited, liquidator Laurence Fitzgerald detailed the complex web of ownership of the company, noting that Prometheon was also the parent company of Tempo Holidays in Australia and NZ which was placed into administration by directors Peter Kerkar and Patrick Tully after its ATAS accreditation was withdrawn. As well as extensive inter-company loans within the group, Fitzgerald highlighted a US$187 million loan agreement with India’s Yes Bank, which has since appointed a receiver to Prometheon due to non-payment of the loan. Tempo Holidays is still on the hook for this massive debt as one of Cox & Kings India’s interconnected web of subsidiaries, meaning its unsecured creditors won’t see a red cent. How does Cox & Kings UK seemingly get off scot-free?
So when Abercrombie & Kent came to the rescue of Cox & Kings UK, the question on everyone’s lips locally was why couldn’t a similar deal have been done here? Certainly there was no attempt made by the administrator to sell Tempo Holidays as a going concern, simply because prior to his appointment all of the staff had been told they had no jobs and there was no possibility of resurrecting things. The most recent accounts showed the business was profitable and trading strongly, which only made the collapse more shocking.
One travelBulletin reader, who wishes to remain anonymous, put it well: “Explain to me how the same business is unaffected in the UK, yet allegedly stripped of cash here?” According to the narrative put out in the UK, the British Cox & Kings business was in fact placed into administration – and then immediately purchased minutes later by A&K for an undisclosed sum.
Whatever the curious machinations behind the deal, the outcome has been a far sight better than the local debacle. All of the UK jobs were saved, and A&K has undertaken to honour all current bookings while also investing further in the business.
All we can say locally is “if only….”