The Rochdale-based firm has sold the operation to its managers and a venture capital firm 3i.

Sunway Travel - based in Rotherham, South Yorkshire - employs 130 people and was bought by MyTravel in 2000.

MyTravel said the deal would cut £16.5m from its debt, which stood at £130m in November.

Credit extension

The sale comes after MyTravel secured an extension to its £250m credit facility with its banks.

The company has run up full-year losses of £72.8m.

Sunway Travel was formed in 1981 and is the parent company of Leger Holidays, which organises coach tours between the UK and Europe.

It made pre-tax profits of £4m in the 12 months up to 30 September.