Minoan Group plans to raise £1.3 million as it plans to offload its travel and leisure division comprising of Stewart Travel to concentrate on building a major resort complex on Crete.
The Glasgow-based company today revealed that it has received a “credible approach” from an unnamed suitor for the acquisition of the travel and leisure division.
“Negotiations are in progress, which may or may not conclude in a sale of the business,” Minoan said.
“Should the disposal go ahead, the board will use the proceeds to repay the majority or all of the debt owed to Hillside International Holdings Limited, which is anticipated to leave the group largely debt free.
“Should there be any excess cash remaining after the repayment of group debt, this will be used for working capital purposes.
“The board expects to be in a position to update its shareholders on the likely outcome in the new year.”
The company’s travel and leisure business employs more than 250 staff with specialists in cruise, business travel, retail, Lapland, golf, Canada and ski holidays.
Minoan described year-to-date trading as remaining in line with management expectations.
The £1.3 million funding being sought partially through a share sale will be used to pay down all of the Minoan’s debt.
In an announcement to the London Stock Exchange this morning, the group said: “Whilst this will allow the management team to concentrate its efforts on optimising value from the Crete project on behalf of its shareholders, the disposal of the travel and leisure division will also remove the company’s principal source of working capital in the short term.
“As a result, the company has adopted a stringently conservative approach to the management of its working capital and is streamlining its working capital requirements and cost base so that funds raised from the subscription and broker offer will be sufficient to provide working capital until the end of the financial year ending 30 October 2018.
“During this period the company may seek third party finance by way of involving other parties in the Crete project.”