Travelex eyes Thomas Cook's Indian business

Struggling holiday company could raise more than £100m from stake in foreign exchange
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The Independent Online

Travelex has emerged as a leading contender to buy Thomas Cook's Indian foreign exchange business, which was put up for sale last week.

The private equity-backed firm is thought to have been one of a handful of businesses to approach Thomas Cook about the asset which could raise more than £100m.

The holiday company has seen trading dive because of unrest in popular destinations such as Egypt, Morocco and Tunisia. It has already sold its Spanish hotel chain to raise cash. Losses trebled in the last quarter to £91m, a result it blamed on "tougher trading conditions and rising fuel costs".

It has been without a permanent chief executive since Manny Fontenla-Novoa was ousted last year after a string of profit warnings that saw its shares crash.

The Indian business is a separately listed outfit in which Thomas Cook has a 77 per cent stake. It traces its activity in the country back to 1881.

Today it operates in 70 Indian cities and employs more than 2,700 in foreign exchange and travel services.

The travel firm Cox & King's and the Japan Tourism Bureau are also thought to be interested bidding for the business.

Travelex is on the prowl for acquisitions after selling two divisions that cleared its debts. The company, set up from a single currency outlet in central London in 1976, reaches into 100 countries and 20,000 locations, and it is about to open in Malaysia and Qatar.

The founder, Lloyd Dorfman, stepped back to become chairman in 2005 when the private equity group Apax bought control of the business, but he retains a 28 per cent stake.

Travelex decided last year to focus on its retail business. It collected £290m from Mastercard for its operation that sells prepaid cash cards. Another £606m was poured into the coffers when Western Union acquired its business payments arm.

Travelex's remaining retail arm has carried on growing despite consumer belt-tightening and civil disturbances across North Africa and the Middle East.