Mexican hotel operator Grupo Posadas said Monday it reached an agreement to sell its properties and management contracts in South America to French hospitality company Accor for $275 million.

The deal covers 15 hotels in Brazil, Argentina and Chile operating under the Caesar Park and Caesar Business brands, Grupo Posadas, Mexico's largest hotel company and a regional leader in the hospitality industry, said in a filing with securities regulators.

Accor had announced the acquisition of 29 hotels, including the Grupo Posadas properties, in South America.

The transaction opens the way for a "significant reduction in debt levels," Grupo Posadas said.

The Mexican hotel company launched its expansion in South America in 1998 via the purchase of the Caesar Park chain and opened its first Caesar Business hotel in 2001.

The portfolio being sold by Grupo Posadas includes three Caesar Park hotels and eight Caesar Business hotels in Brazil; two Caesar Park properties in Argentina; and two Caesar Business hotels in Chile.

This is the right time to do the deal and strengthen the company's balance sheet, bolstering the growth strategy and maintaining the focus on the domestic tourism market in Mexico, Grupo Posadas CEO Jose Carlos Azcarraga said.

"The investment we made in South America was very profitable and this sale allows us to monetize it, with the goal of continuing to be the leading hotel company in Mexico, where we have 102 hotels and more than 17,600 rooms in 50 beach and city destinations," Azcarraga said.

The sale concludes the process that started last year of "evaluating and executing the necessary alternatives to strengthen the balance sheet," CFO Ruben Camiro said.

"The resources will be used to improve the company's financial profile," Camiro said.

The hospitality company launched One Hotels, the first economy class brand in Mexico, in 2005.

Grupo Posadas, which was founded by Gaston Azcarraga Tamayo in 1967, has been listed on the Mexico City Stock Exchange since 1992.

The company entered the adventure tourism segment in 1999 with The Explorean brand and opened its first Fiesta Americana Vacation Club property that same year. EFE