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Cox & Kings of India misses debt payments; U.S. business unaffected

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This report was updated on Monday to add that Cox & Kings, The Americas in unaffected by the financial problems of Cox & Kings Ltd. of India.
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Cox & Kings Ltd. of India, one of the world's oldest travel companies, has fallen behind on $100 million in debt payments, forcing the closure of two businesses in the U.K. and a suspension of its ability to sell airline tickets on credit. 

Officials with their U.S. affiliate, Cox & Kings, The Americas, however, emphasize the company is fully independent in its business activities and is operating business as usual.

"We want to reassure all stakeholders in the United States that there is no disruption in our U.S. operations whatsoever," Cox & Kings, The Americas said in a statement issued Monday. "Neither have there been any cancellations nor interruptions, either to current business or that booked for future travel. These have been reconfirmed with our vendor network, ensuring continued seamless arrangements, including guests traveling to India from the U.S." 

Cox & Kings Ltd. informed the National Stock Exchange of India last week that it would miss its payment on a $100 million commercial note for the fourth time in three weeks.

Also last week, two British travel companies, LateRooms and SuperBreak, ceased operations after their parent, Malvern Group, declared insolvency, citing a loss of funding from Cox & Kings, which owns a 49% stake in the company.

India-based Cox & Kings did not immediately respond to a request for comment. But after IATA suspended its ability to sell airline tickets on a credit basis last month, it said in a press release that the "working capital situation at Cox & Kings stretched in the last few months and was further impacted due to its inability to replace the short-term loans with long-term loans and regular working capital line."

In the July 30 filing notifying the stock exchange that it would miss a fourth payment on the $100 million note, the company said it was "working closely with its lenders to optimize its asset base globally and bring the situation back to normal as soon as possible."

Meantime, according to British and Indian media reports, officials from KPMG were appointed as administrators of LateRooms and SuperBreak to seek suitors and to work with the Association of British Travel Agents and the U.K. Civil Aviation Authority to minimize disruptions to travelers who had bookings though the companies.

According to British newspaper The Sun, about 20,000 bookings involving 53,000 people were thought to be affected.

An ABTA spokesperson told The Sun that the vast majority of bookings through SuperBreak would be covered "through one of a number of different types of financial protection," including ABTA backing and credit card protections. LateRooms was not a member, ABTA said.

Cox & Kings Ltd. was established in 1758 and now has operations in 23 countries with $2.5 billion in annual transaction value, according to its website. 

Based in Los Angeles, Cox & Kings, The Americas is a direct subsidiary of Cox & Kings Travel Ltd. UK, which itself operates independently from Cox & Kings Ltd. (India). Both are operating as normal, the statement said.

The company also emphasized that "as an active member of USTOA, significant customer protection is required and carried. The business also holds supplemental insurance policies, such as Errors & Omissions, which are well above industry standards, and does so to offer additional peace of mind to our clients. "

According to the Economic Times of India, several companies are pursuing attempts to acquire the cash-strapped Cox &. Kings Ltd.

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