Specialist travel group Western and Oriental will seek shareholder approval for the sale of its loss-making travel division, including the W&O Travel and Regent Holiday brands, next month.
It has provisionally scheduled a general meeting on April 7 in which it will ask shareholders to vote in favour of the sale to Furze International, owned by Raj Kumar who has already loaned Western & Oriental £800,000.
The travel business made a loss of £6.1m for the year ended September 30 2010 compared with a profit of £940,000 the previous year.
At least 50% of shareholders attending the general meeting must vote in favour of the disposal for the sale to go ahead. The company intends to hold on to its events division, which made a profit of £700,000 last year.
Western and Oriental issued a statement today saying the Board had approved the sale of the travel businesses to Mr Kumar, a W&O shareholder. He has agreed to provide in excess of £4m funding in the form of guarantees and cash to finalise the sale and create investment for the future growth of the tour operating division, added the statement.
Western and Oriental Travel managing director Kerry Golds said: “Our commitment to securing a strong future for the business remains steadfast and we are scrutinising ways in which we can invest in and grow the business in the short, medium and long term.
"We will continue to make significant investment in the travel trade and our absolute commitment to delivering a specialist service of the highest standards is unchanged.”
At the general meeting, Western and Oriental shareholders will also be asked to vote in favour of cancelling the company’s listing on the AIM from April 15, a move which will save Western and Oriental £200,000 a year.
By Linsey McNeill
