Thomas Cook offloads its hotels stake

by Alfie FEATHERSTONE on December 14, 2011

Debt-ridden Thomas Cook has sold the stake it held in five hotels, as well as a Spanish golf club, as part of a pledge to get rid of assets worth a total of £200 million.

The firm, which is set to present its delayed annual results today, will carry on accessing the portfolio of hotels it has under a special commercial agreement with Iberostar. The total sale price is 72.2 million euro but, with the hotels sold with a net debt of almost 22.5 million euro, the deal will thankfully reduce Thomas Cook’s outstanding borrowings by £80 million.

Company Chief executive Sam Weihagen said that the transaction will significantly reduce Thomas Cook’s company’s net debt while demonstrating the ongoing commitment to make sure the balance sheet is strengthened. Recently, there were fears over the company’s future after it had request an additional £100 million lifeline from the banks it deals with.

The deal with bankers, just a month after loans were increased by a similar amount, emerged as it said that its markets in France and Belgium saw bookings drop by up to 20 per cent in recent weeks. It is understood that the firm could today announce a loss of 1,000 jobs as a result of it having to close 200 of its total 1,100 UK travel shops in an attempt to slash costs.

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