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Tourism Holdings' share price sunk to a new low after it announced plans to pull out of its joint venture with InterCity just a year after signing up to the deal.
Shares in the campervan manufacturer and rental group fell 2c to hit 59c yesterday, down from a
year high of $2.35 and the lowest the group has traded at since 1991. The shares closed at 60c.
The fall came as the company announced a conditional sale of its 49 per cent stake in joint venture InterCity Holdings to InterCity for $9.5 million - at a book loss of $3.7 million.
InterCity Holdings was formed in December last year when Tourism Holdings sold its Fullers Bay of Islands and Great Sights businesses to InterCity for $16 million in cash.
At the time, the then chief executive of Tourism Holdings Trevor Hall said the joint venture would lead to synergies and create further opportunities for the company.
But yesterday new chief executive Grant Webster, who only took over the role on Monday, said it was no longer core to the company's business.
Webster said the firm had gone into the joint venture thinking it was the right thing at the time.
"But once we got into it we saw it would be better suited to being in private hands rather than the private/public mix."
He said the sale would give the businesses a single committed shareholder.
Webster said Tourism Holdings had taken associated earnings during the year, but after the sale had been taken into account it would make a loss for the year on the business.
The breakup of the joint venture is the latest in a long line of asset sales which the company has made in its leisure division, including the sale of Kelly Tarlton's Underwater World.
The only remaining assets it has from the division are Kiwi Experience backpackers coaching, Fiji coaching and the Waitomo Caves attraction.
Webster said the company was not in discussions with anyone to sell any of those assets but could not rule it out in the future.
InterCity Holdings chief executive Malcolm Johns said the business had faced a challenging year with fuel prices spiking at the start of the year and its tourism business now facing global economic uncertainty.