Thomas Cook investors approve assets sale to reduce debt

Investors of embattled travel services provider Thomas Cook Group Plc yesterday approved the company's plans to sell some assets in order to reduce debt.

At a private investor meeting in London, shareholders approved the sale and leaseback of 19 aircraft to Guggenheim Aviation Partners, sale of its five Spanish hotel chain Hotels Y Clubs De Vacaciones to Grupo, for a total of £239 million ($375 million).

Investors also approved the sale of the company's 77-per cent stake of Thomas Cook (India) for £94 million ($150 million).

Failure to support the sale could have jeopardised the company's recent £1.4-billion loan from lenders, including Royal Bank of Scotland and Barclays, to extend the maturity of its bank loans to 2015.

Earlier this month, Thomas Cook, Europe's largest tour operator and the UK's second-largest foreign exchange group, which is estimated to have net debt of £900 million, secured a three-year loan of £1.4 billion - its third refinancing in a year.

Manny Fontenla-Novoa, who led Thomas Cook since 2007, had resigned in August 2011 after three profit warnings in a year amid weak demand for travel that triggered an 80 per cent decline in its share price.

The company blamed the nearly £400 million loss in the first six months of 2011 to the floods in Thailand and the uprisings in Egypt and Tunisia.

The 170 year-old company plans to sell non-core assets to raise money to pay down debt, including the company's stake in the air traffic control group Nats.
 
Last year it agreed to sell surplus office property in Hoofddorp, The Netherlands to FN2 B.V., a Fotex Group company, for £15 million in cash.
 
As expected, Thomas Cook Group late last year announced plans to close 200 of its travel agencies in the UK over the next two years, which will leave the world's oldest travel agency with about 1,100 high street travel offices across the UK.
 
The London-based company is due to post interim results this week and has already revealed losses of £263 million for the winter due to declining sales in North America and France.