MyTravel secures debt rescue deal
MyTravel hopes to complete its overhaul by the start of 2005
Tour company MyTravel has reached a deal with bondholders on how to reshape the firm, hours before they were due to go to the High Court.
The former Airtours group had been set to go to the High Court to get approval for an £800m debt-for-equity swap.
Bondholders, who were owed £216m, last month rejected a deal which left them with 8% of the group’s capital.
They have now agreed to accept the 8% offer, amid fears that a court case could leave them with as little as 2%.
Deal nearly done
The proposals are still subject to a vote by shareholders and creditors, but Rochdale-based MyTravel said it hoped to complete its overhaul by the start of the new year.
“The restructuring is nearing completion and will provide a sound foundation for the future of the group,” it said in a statement.
We are pleased… issues with the company have now been resolved
Bondholders’ statement
Latest MyTravel share price
MyTravel also said it would no longer seek the court’s ruling on whether bondholders had an economic interest in the company and as such were not entitled to have a say in the restructuring.
Bondholders had feared that this would set a dangerous precedent for the bond market.
The company will pay the legal costs of the bondholders and interest on the bonds up to 25 August, 2004.
A spokesman for the bondholders said: “The committee decided to support the consensual restructuring following MyTravel’s decision it would no longer seek a ruling on whether the bondholders have an economic interest in MyTravel.
“The bondholders have always been open to a consensual deal, and are pleased that their issues with the company have now been resolved.”
MyTravel ran into financial trouble after an unsuccessful expansion drive and announced a pre-tax loss of £190.3m ($367m) in the 13 months to 31 October.
The company has seven million customers a year and employs 16,000 people around the world.
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December 20, 2004 at 10:54 pm