Cox & Kings Financial gives up NBFC licence

BENGALURU: Cox & Kings Financial Service on Monday saw its stock price fall after the company surrendered its non-banking financial company (NBFC) licence. Cox & Kings Financial’s stock fell 6.25% to Rs 0.75 on Monday, while parent company Cox & Kings’ stock climbed 5% and ended the day at Rs 4.20 on the NSE.
Cox & Kings Financial Service had announced after its board meeting on September 13 that it has decided to surrender its NBFC licence. In its BSE filing, Cox & Kings said that, “considering the ongoing challenges and slowdown in the NBFC business environment, the board of directors of the company, at its meeting held on September 13, has considered and approved the surrender of NBFC licence”.

With market rumours abounding, parent firm Cox & Kings’ stock had hit a 52-week low at Rs 3.10 on Friday, down from a high of Rs 223 last year. On Monday, the company recovered in part its losses as news of its decision to exit the NBFC business spread. Sources said that the company has been struggling to make vendor payments and has GST and income tax dues.

A mail to the company did not evoke a response.

Earlier this month, Cox & Kings informed the exchanges that it is considering a possible sale of its Meininger hotels business as it seeks to meet its financial obligations. “The company proposes to meet its financial obligations through a combination of internal accruals and monetisation of assets, and is in the process of evaluating the potential of every business to generate cash flows.”

In August, the company also informed the exchanges its inability to declare financial results for the quarter ended June 30 as it was trying to come up with a resolution plan to revive the company. Facing a liquidity crunch, the company has defaulted on commercial papers worth in the Rs 10-174-crore range.