Thomas Cook Group has reached agreement to sell its interest in Hoteles Y Clubs De Vacaciones (HCV) to Iberostar Hoteles y Apartamentos (IBS), the hotel division of Grupo Iberostar. Under the terms agreed with IBS, Thomas Cook will receive cash proceeds of €72.2 million from the transaction.

Completion is conditional upon shareholder approval.

HCV is a holding company that, together with another shareholder, indirectly owns five Spanish hotels and one golf club as well as operating a second golf club in Spain.

As at 30 September 2011, HCV had gross assets of €77.3 million and net assets of €36.8 million.

IBS together with co-investors will pay up to €94 million to acquire 100% of HCV and a subsidiary company. Thomas Cook’s share of the proceeds of €72.2 million includes consideration from the sale of Thomas Cook’s shares in HCV and the settlement of a debt owed to Thomas Cook.

The sale of HCV is part of Thomas Cook’s disposal programme announced earlier this year, which has targeted selling up to £200 million of non-core assets over a 6- to 18-month period. Thomas Cook will continue to benefit from access to HCV’s hotel portfolio through a separate commercial arrangement that has been agreed with IBS.

HCV is being sold with net debt of €22.4 million, so the transaction will reduce Thomas Cook’s net debt by €94.6 million, which equates to approximately £81 million at current exchange rates. The proceeds of the sale of HCV will be used to reduce Thomas Cook’s borrowings and/or for general corporate purposes.

Sam Weihagen, Group Chief Executive, Thomas Cook Group said this transaction will significantly reduce Thomas Cook’s net debt.

Thomas Cook was last month forced to renegotiate bank loans.

The group reached agreement with its banking group to provide it with a new facility. The group’s banks, led by Barclays, HSBC, RBS and UniCredit, agreed to provide a new £200m facility available until 30 April 2013, which replaced the £100m short-term facility finalised in October. In addition, the banks also agreed to a further relaxation of the financial covenants under the existing facilities.