Bloomberg News

Thomas Cook Eases Debt Burden With Spanish Hotel Disposal

December 13, 2011

(Updates with shares in second paragraph, CEO statement in third.)

Dec. 13 (Bloomberg) -- Thomas Cook Group Plc, Europe’s second-largest tour operator, agreed to sell its interest in Hoteles y Clubs de Vacaciones SA to Grupo Iberostar’s hotel unit as part of a plan to trim debt by selling assets.

Thomas Cook will get 72.2 million euros ($95 million) in cash from the sale to Iberostar Hoteles y Apartamentos S.L., the company said today in a statement. HCV is being sold with net debt of 22.4 million euros and the disposal will cut Thomas Cook’s borrowings by 94.6 million euros, it said. The stock gained as much as 6.7 percent in London.

“I am delighted that we have been able to agree this transaction which will significantly reduce Thomas Cook’s net debt and demonstrate our ongoing commitment to strengthen the balance sheet,” Chief Executive Officer Sam Weihagen said in the release.

Thomas Cook rose 4.8 percent to 16 pence at 8:11 a.m. in London. The company will “continue to benefit from access to HCV’s hotel portfolio through a separate commercial arrangement,” according to the statement.

Thomas Cook, the 170-year-old company based in London, has plunged 92 percent this year after a squeeze on consumer spending in the U.K. and political unrest in North Africa reduced holiday bookings. A group of banks agreed to provide a 200 million-pound ($312 million) loan to the tour operator, the company said Nov. 25, giving it time to reorganize its business. Thomas Cook may generate as much as 200 million pounds from selling assets, it said in August.

The company, which delayed its full-year results, will report earnings tomorrow. So-called headline operating profit for the year ended Sept. 30 is expected to be “broadly in line” with previous guidance of about 320 million pounds, Thomas Cook said Nov. 22.

--Editors: Marthe Fourcade, Paul Jarvis.

To contact the reporter on this story: Clementine Fletcher in London at cfletcher5@bloomberg.net

To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net


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