CNG Sells Leisure Division
SEPTEMBER 27, 2005. CNG Travel Group plc has today completed the sale of the business and assets of its Leisure Division for an initial cash consideration of US $2.5million which CNG will apply to reduce its liabilities.
In addition, CNG will receive further performance based payments over the next three calendar years, up to an aggregate total of US $1.1 million. The purchaser is FEXCO All Travel Limited, a privately-owned, Ireland-based subsidiary of FEXCO, the global payments group.
CNG announced in June 2005 that following a strategic review, it would exit from the B2C leisure market. The disposal includes CNG's consumer-facing hotel booking web site, www.placestostay.com, and its affiliate business, which provides technology solutions and private rate hotel inventory to affiliate partners such as airline web sites and other online portals.
CNG's Leisure Division generated turnover of approximately US$14.2million for the year ended 31 December 2004, and its gross assets had a value of US$16.4million as at 31 December 2004. Included in the gross assets is an amount of US$13.5million representing the investment in the Places to Stay acquisition, which will create an impairment charge in the interim results to 30 June 2005 of US$11.4million. Net current liabilities at 31 December 2004 were US$3.1million and the division sustained losses in excess of US$2million for the six months ended 30 June 2005.
PJ King, Acting CEO of CNG Travel Group plc, said: "CNG will now be able to focus its resources and management time on core operations in our US-based Tzell corporate travel agency business. We will continue to develop and market our Travel Lodging Connector (TLC) technology platform to travel agents."
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