|By Simon English, London Evening
StandardMcClatchy-Tribune Regional News
Dec. 13, 2011--Crisis-torn Thomas Cook offloaded a Spanish hotels and golf club business today as part of a drive to slash debts that threaten to engulf the 170-year-old company.
The move comes one day ahead of delayed annual results that are expected to see Cook announce a sweeping package of store closures and job cuts, and perhaps a new corporate strategy.
It is selling its stake in Hoteles Y Clubs De Vacaciones -- five hotels and golf club -- for euro 72.2 million (pounds sterling 61 million).
Because the firm holds debts of euro 22.4 million, the transaction will ease Cook's pounds sterling 1 billion debt predicament by euro 94.6 million in all. Thomas Cook will still be able to book the hotels for its customers via a deal with new owner Iberostar.
The company was thrown into crisis two weeks ago when it delayed its results announcement, admitted present trading is awful and said it needed a cash injection from banks to survive.
It has since cut a deal that will get it through the tricky winter period and hopefully give it breathing space to regroup.
The company is without a permanent boss since ousting Manny Fontenla-Novoa in the summer. He was paid pounds sterling 15 million since 2007.
Thomas Cook employs 30,000 people, of which 20,000 are in stores up and down the country. Analysts expect it to shut at least 200 of its 1100 travel shops and axe around 1000 jobs. It could also unveil a move upmarket, an admission that its present offering is seen as out of date.
Interim chief executive Sam Weihagen said today's deal "demonstrates our ongoing commitment to strengthen the balance sheet".
The battered shares -- they fell 70 percent on the day it admitted to being in trouble -- edged up 0.32p to 15.59p.
Thomas Cook has been left looking increasingly flat-flooted by arch-rival Tui, owner of the Thomson package tours brand, which last week reported an 18 percent leap in full-year profits.
(c)2011 the London Evening Standard
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