Cox & Kings hits 52w low; working to fix cash flow mismatch

Cox & Kings is looking to take necessary steps to fix the temporary cash flow mismatch, while the company's stock continued its downward spiral. The company will also approach lenders to work out a 'time-bound' solution to this emergency, informed the company in a filing.

On June 27, 2019, the company defaulted on payment of commercial papers due to cash flow mismatch. The company was required to pay Rs. 200 crore, however, it was able to pay only Rs. 50 and defaulted on Rs. 150 crore. Moreover, the company is focusing on cash flow generation from each business unit and working at the highest priority to free working capital. The company's working capital situation has been stretched in the last few months and was further impacted due to its inability to replace the short-term loans with long term loans / regular working capital lines, said the company. 

Meanwhile, the credit rating agency CARE downgraded various financial instruments of Cox & Kings. Bank Facilities worth Rs. 1760 crore and NCD worth Rs. 525 crore both were downgraded to BB stable from AA stable. While commercial paper worth Rs. 1,685 crore was revised to A4 from A1+.

The stock of Cox & Kings in the last one year has eroded investors’ wealth as it fell nearly 85 per cent from its 52-week high of Rs. 211.90 per share. On Tuesday, the stock opened gap down locked at its lower circuit limit at Rs. 32.95 apiece, which is also a new 52-week low for the stock.