Prem Watsa backed Thomas Cook set to take over Sterling Holidays & Resorts

MUMBAI: Billionnaire Prem Watsa backed Thomas Cook is set to take over Chennai-based vacation ownership company Sterling Holidays & Resorts.

The move will help Thomas Cook to get a firm foothold in the growing vacation ownership business.

The boards of both the companies will meet today to discuss a merger proposal.

Under the merger terms, Canada-based insurer Fairbridge Capital, part of the Fairfax group, will increase stake in Thomas Cook India by subscribing to the Compulsory Convertible Debentures which will be converted into equity shares, said investment bankers close to the transaction.

Sterling Resorts and Holidays will then be merged with Thomas Cook India. Post merger, Fairfax will own 67% of Thomas Cook India, Bay Capital will own 9% and rest by shareholders of both the companies.

“Prem Watsa is bullish on India. That is why he is pumping more money into Indian operations,” said one of the bankers. The money will come directly to Thomas Cook India which will be used for its expansion.
CCDS can be converted after 18 months and this will help Fairfax, the parent company of Thomas Cook, to increase its shareholding. Fairfax currently holds 74.5% stake in Thomas Cook India.