THOMAS COOK(TC) - RESTRUCTURING SCHEME QUESS CORPORATION(QC

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by FUNDOO, Apr 6, 2018.

  1. FUNDOO

    FUNDOO New Member

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    THOMAS COOK(TC) - RESTRUCTURING SCHEME RELATED TO QUESS CORPORATION(QC) ****** If an investor buys 100 shares of TC at CMP of Rs. 280/- , he pays Rs. 28000/-, for which he gets 20 shares of QC valued at Rs. 21000/- at CMP of Rs. 1050/-. Thus your residual 100 TC shares will cost you Rs. 7000/- at Rs. 70/- per share. On record date, the price of TC will also fall as QC is a major contributor to the Operating Profit of TC. Looking at the current paid up capitals of both cos., holding of TC in QC and market prices of both the shares, value of QC per share of TC comes to about Rs. 205. Taking holding Co. discount of 40%, the QC shares could be considered to be currently discounted by about Rs. 80/-. It is this discount which is likely to disappear immediately on implementation of the restructuring scheme, pushing the TC price by the same amount. I would therefore expect effective price of Rs. 360/- for TC. ( Value QC at 21000 and TC at 15000). Thus purchase of TC at CMP of Rs. 280/- can yield a return of about 25% on implementation of the scheme in next 3 to 6 months.
     
    shakti khanduri likes this.
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