A deal to sell the travel and leisure division of Scottish group Minoan has taken a major step forward.
An exclusivity agreement has been signed with an unnamed preferred buyer of the division, which includes long-established agency Stewart Travel and brands covering cruise, ski, golf and Canada.
The Glasgow-based division employs more than 250 staff.
“The due diligence process has begun and is proceeding according to plan. Under the heads of terms, the sale, when completed, would leave the group substantially debt free,” Minoan said in an update to shareholders today.
Trading for the division for the first quarter of the financial year was described as being “significantly ahead” of the same period last year with unaudited gross sales up by 15%.
Commission is up 10%, with the difference largely accounted for by a change in sales mix, according to the company.
The group is now focusing on a long-planned planned resort development in Crete, potentially with a new partner.
“The company has recently received an approach from a credible party which has expressed an interest in acquiring a significant stake in the project,” Minoan revealed.
“Discussions are at an early stage and the company will provide shareholders with an update in due course.”
The group’s annual results are expected to be published at the end of the month together with any further news.
Minoan revealed plans for a small debt fundraising which will enable it to meet its liabilities until the “material and positive developments outlined are closer to crystalisation”.
The company said: “At the current share price the market capitalisation of the quoted group is approximately £11.4 million which represents a discount of over 70% to the group’s last published net asset value of £43 million.
“As a result the directors take the view that, where debt finance is available, it is preferable to issuing ordinary shares at current levels.”
However, the group is going ahead and issuing new shares “in order to meet certain prior obligations”.
More: Minoan in talks to sell travel division after receiving ‘credible approach’