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178-year-old tour company Thomas Cook collapsed due to shortage of funds

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178-year-old tour company Thomas Cook collapsed due to shortage of funds

Thomas Cook, one of the world’s largest travel companies, closed on Sunday night. The 178-year-old British tour operator had been struggling with a shortage of funds for a long time. According to media reports, the company said in a statement that “they had no choice but to close the company.”

On Monday the very old British Tour company Thomas Cook collapsed after failing to secure rescue funding travel bookings and for its more than 600,000 global vacationers were canceled early Monday.

The closure of the company has put 22,000 jobs at risk, of which 9,000 are UK employees.

The closure of the company will affect not only employees but also customers, suppliers, and partners of the company. Therefore Peter Cook, Chief Executive of Thomas Cook, apologized to customers, suppliers, employees, and partners.

In this case, the UK’s Civil Aviation Authority (CAA) has said that from 23 September to 6 October the regulator and the government will work together to bring more than 150,000 British customers back home. The CAA tweeted that all bookings have been canceled. The world’s oldest travel company had been struggling with a shortage of funds for a long time and a committee of banks stayed the decision on its demand for additional funds. Earlier last month, Thomas Cook agreed to the key terms of a deal with China’s shareholder Fosun over a plan related to recapitalization. The deal was worth $ 1.1 billion.

Royal Bank of Scotland (RBS) also gave a blow to the company. A spokesman for the bank said the company’s demand for additional funds of £ 200 million was not marked. However, RBS has been providing help to the company for the last several years.

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Flipkart to enter food retail with Rs 2,500cr

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Flipkart, the Walmart-owned Indian e-commerce company, has registered a new company called Flipkart Farmermart Pvt in India to deepen its penetration in the food retail space, take on Amazon, and run a farm-to-fork operation, sources told Moneycontrol.

Through Flipkart Farmermart, the e-commerce company will operate a full-fledged food retail business, including its own private label, a grocery supply chain and even open stores.

“There is a lot more than Flipkart can do in food. The board has consented to invest Rs 2,500 crore to expand its operations in the grocery business,” a source said.

Flipkart is late to the party. Amazon secured a food retail license in July 2017 and has since been investing to build its grocery business. Flipkart will now apply for a licence and then will have to get a go-head from the Department of Industrial Policy and Promotion (DIPP) to invest in food retail.

“It is critical for Flipkart to get this piece right. Grocery is the stickiest business that any e-commerce company can build. There is a huge repeat factor, which is not there with electronics or fashion or furniture,” a second source explained.

Flipkart hopes to bank on Walmart’s expertise in building its food supply chain. The American retailer already runs a cash-and-carry (or wholesale) business in India and has tie-ups with farmers for grocery and food produce. “That will be a big help for Flipkart, it being a subsidiary company. It will also allow Walmart to bring in its understanding and wherewithal of the grocery business to consumer business,” the first source said.

It is too early to say if Flipkart will open up stores or stick to an online-only selling model, but “there are possibilities that it might open up stores in major cities in the coming years. That gives a lot of mindshare to a company, especially in food and grocery,” the source added.

The online grocery market in India is just opening up. According to research firm Research and Markets, only 0.15 percent (or two million out of 1.35 billion) Indians make purchases through online channels. However, the market is anticipated to expand at a compound annual growth rate (CAGR) of 68.66 percent between 2018 and 2023 to reach over Rs 1 lakh crore.

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Azim Premji drops from 2nd to 17th position after a chunk of charity

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Wipro founder and tech tycoon Azim Premji has dropped to 17th spot from the second position on Forbes India Rich List after giving away a substantial portion of his fortune to charity. Premji saw his net worth plunges to $7.2 billion from $21 billion last year.

“In all, 14 were poorer by $1 billion or more, and nine members from last year’s ranks dropped off. More than a third of that decline was due to the remarkable largesse of tech tycoon Azim Premji, who gave away a chunk of his fortune in March and consequently dropped in the ranks to No. 17 from No. 2,” Forbes said.

ArcelorMittal chairman and CEO Lakshmi Mittal’s net worth also plunged to $10.4 billion to the ninth spot this year. The steel baron had bagged third place last year with a net worth of $18.3 billion. This steep decline came on account of falling steel prices and muted demand.
“Steel baron Lakshmi Mittal, who has yet to complete the acquisition of bankrupt Essar Steel, took a $7.8 billion hit amid falling steel prices and weak demand,” Forbes added.

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Passenger vehicle sales slow down by 24% and commercial by 62%

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Passenger vehicle sales slumped 23.7% in September – the eleventh straight month of declines – amid one of the worst slowdowns seen in India’s auto industry, data released by an industry body showed on Friday.

Passenger vehicle sales dropped to 2,23,317 units in September, the Society of Indian Automobile Manufacturers (SIAM) data showed, while passenger car sales dived 33.4 percent to 1,31,281 units.

The data comes as the domestic automobile industry faces a crippling slowdown in demand that has led to production cuts and thousands of job losses.

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