11 Feb 2014 07:00
11 February 2014
Thomas Cook Group plc announces sale of Gold Medal to dnata
Thomas Cook Group plc announces today that it has entered into an agreement to sell Gold Medal, a UK-based distributor of long-haul scheduled flights, hotels and car hire, to dnata, the Dubai-based travel company that is part of the Emirates Group, for total consideration of £45m. The transaction is expected to complete on or about 27 February 2014.
Post-transaction, Gold Medal will continue as the exclusive supplier of long-haul scheduled flights to the Thomas Cook businesses in the UK under the terms of a long-term commercial agreement, increasing the range of flexible options to meet the travel needs of Thomas Cook's customers.
Commenting on the sale of Gold Medal, Harriet Green, Group Chief Executive Officer of Thomas Cook Group plc, said:
"This latest transaction represents another important step in the transformation of our UK business, consistent with our strategy of focusing on our core brands and products, whilst offering our customers choice and flexibility. It brings the total amount generated by our divestitures programme to £125 million, thereby achieving our previously communicated target of £100m - £150m in divestitures by the end of FY15, and thus demonstrating that we continue to deliver on our commitments, in this case, 18 months prior to our target date.
We believe that this latest strategic partnership with Gold Medal and dnata will further enhance the wide range of flexible options we are able to offer our customers. Extending our portfolio of strategic partnerships in this way is beneficial for all of our stakeholders and we look forward to working more closely with dnata in the future and wish the new venture continued success."
Notes to Editors:
(1) The sale of Gold Medal will result in a loss on disposal of £34m, principally arising from the write-off of goodwill recognised at the time of acquisition in 2009.
(2) The Gold Medal business is based in Preston and employs c. 470 people, all of whom are expected to remain with the business on completion of the transaction. Members of Gold Medal's core management team include Steve Barrass (Managing Director), Paul Smith (Finance Director), Robin Parry (Marketing, Product & Commercial Director), Simon Hulme (IT Director) and Lisa Smith (Director of Operations).
(3) Proceeds from the sale of Gold Medal will, in part, be applied to reduce certain financing commitments in favour of Thomas Cook under its senior bank facilities.
(4) The sale of Gold Medal involves the disposal of the two trading companies, Gold Medal Travel Group Plc and Airline Network Plc. The aggregate value of the gross assets of these two companies as at 30 September 2013 was £116m, and the combined net profit before tax attributable to such companies was £6m, before accounting for exceptional profits of £14m primarily arising as a result of a reversal of an impairment of intercompany receivables recognised in prior years (source: audited accounts for the financial year ended 30 September 2013).