Minoan today confirmed an agreement to sell Scottish agency Stewart Travel for £6.5 million.
The company announced that it has entered into a conditional sale and purchase agreement with Zachary Asset Holdings.
In addition Zachary will lend Stewart Travel via loans to Brooklyn Travel Holdings and Brooklyn Travel sufficient money to enable it to repay inter-company debt of £781,749 to Minoan.
Zachary took over Minoan’s debt in early July after the company previously negotiated several extensions to a loan first taken out with Jersey-based Hillside International Holdings in October 2013.
Completion of the sale of the travel arm will also allow Minoan to concentrate on optimising the value of the group’s luxury resort project in Crete.
Managing director Duncan Wilson and senior Stewart Travel senior managers Rick Green and Brian Cassidy will hold a 25% equity stake in Brooklyn Travel Holdings and Zachary is due to transfer Stewart Travel to Brooklyn Travel in completion of the deal.
“The decision to dispose of the group’s travel and leisure division has not been taken lightly,” Minoan said.
The main reason for the disposal is that Minoan has been unable to raise funds on acceptable terms to expand the division as fast as it had originally planned.
This has has placed a strain on the group’s resources and an inability to reduce its significant debt and associated costs, Minoan said.
Stewart Travel reported revenues of £8.7 million with a pre-tax profit of £488,088. Stewart Travel had total assets of £10.2 million in the financial year ended October 31, 2017.