Thunderbird Resorts Inc. (FRANKFURT:4TR)(EURONEXT:TBIRD) announces that it has sold its non-strategic El Pueblo Resort & Convention Center in Lima, Peru for approximately $13.6 million. This hotel generated approximately $602 thousand in EBITDA in 2011 or just 3% of the Group's consolidated adjusted EBITDA. Approximately $9.5 million of the proceeds from the sale have immediately been used to pay down Peru senior debt principal balances. The remaining proceeds from the sale of El Pueblo will be used to pay other debt, taxes and transactional costs.
The Group's gross debt1 as of December 31, 2011 was $78 million, meaning that gross debt has now been reduced to approximately $69 million or 3.6X adjusted EBITDA. The Group has aggressively reduced debt in order to: a) build a balance sheet and capital structure to mitigate risk, improve bankability and support investments in growth; and b) reduce financing costs to improve cash flow and profitability. The Group reduced financing costs from $18.1 million in 2010 to $11.5 million in 2011. With the further $9.5 million in senior debt pay down, scheduled amortizations and other refinancings announced in late 2011 and in 2012 year-to-date, the Group expects financing costs to reduce further during 2012.
1 "Gross debt", previously called "debt from continuing and discontinued operations", is defined as the aggregate of borrowings, obligations under leases and hire purchase contracts and derivative financial instruments, associated with the Group's continuing, discontinued and held for sale segments.
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