Sale of North American Business

20 March 2013

Thomas Cook Group plc

Thomas Cook announces sale of North American business

Thomas Cook Group plc announces today that it has agreed to sell Thomas Cook Canada Inc. and Thomas Cook USA Holdings, Inc., together known as Thomas Cook North America ("TCNA"), to Red Label Vacations Inc. (which trades as Redtag.ca "Red Tag"). The transaction is for cash consideration of $5.3 million Canadian dollars (£3.4 million at current exchange rates).

TCNA operates a tour operator and distribution network in Canada. TCNA also owns ABC Corporate Services Inc. and D-FW Travel Arrangements Inc. in the United States. 

Completion of the transaction is subject to a number of conditions, including clearance by the Competition Bureau of Canada, the release of guarantees provided by Thomas Cook Group plc to third parties on behalf of TCNA and the release of guarantees provided by TCNA in support of the Group's financing arrangements. The transaction is expected to complete by 31 May 2013. Proceeds will be used to reduce the borrowings of the Thomas Cook Group. 

Harriet Green, Chief Executive, Thomas Cook Group plc said:

"As we continue to drive the transformation of the Thomas Cook Group I am pleased to have reached agreement to divest our North American business, enabling us to focus on our core segments and future growth. The combination of TCNA's product portfolio and Red Tag's online presence form an attractive proposition for Canadian customers and we wish the team every success in the future".

Enquiries:

Investors & analysts:

Geoffrey Pelham-Lane, Group Head of Investor Relations

+44 20 7557 6414

Media:

Jenny Peters, Group Head of Communications

Note to editors:

1. £0.2m of the cash consideration is payable on completion. The balance of £3.2m is payable in three equal instalments no later than 30 June, 30 September and 31 December 2013.

2. As at 30 September 2012, TCNA had gross assets of £169.3 million.

3. For the year ended 30 September 2012, TCNA recorded a loss before tax of £86.7 million.

4. The local management team at TCNA is led by Dean Moore who will lead the business under its new ownership.

5. As at 30 September 2012, TCNA had £40m of restricted cash, comprising customer advances which are held in a segregated bank account for regulatory purposes. This cash will be sold as part of the transaction.

6. The Group expects the transaction to be earnings accretive in the current financial year.

About Thomas Cook Group plc

Thomas Cook Group plc is one of the world's leading leisure travel groups with sales of £9.5 billion and 23 million customers in the year ended 30 September 2012. It is number one or two in all its core markets. After the completion of the transaction to divest Thomas Cook North America, Thomas Cook will operate in 19 countries with 29,000 full time equivalent employees. Thomas Cook Group plc's shares are listed on the London Stock Exchange (TCG).

About Red Tag

Red Tag is a privately owned online travel agent based in Toronto, Canada. Its founders Enzo, Joe and Frank DeMarinis collectively have over 75 years experience in the retail travel market.