MyTravel in talks with banks
BOSSES of debt-laden holiday operator MyTravel were locked in meetings with the company‘s major lenders today to discuss a financial restructuring plan to stave off a potential collapse.
The company, which has some £1.3bn debt, said it planned to convert unsecured debt into equity as part of its restructuring.
While the equity-conversion proposal does not quantify the total amount of equity to be issued, the company said that any such deal would result in a very significant dilution for existing holders of equity and bonds.
The Airtours-to-Going Places company flirted with disaster two years ago. It laid off some 2,000 staff and issued a string of profits warnings that triggered a boardroom clear-out. The exodus of top executives has continued. The most recent director to go through to the departure lounge was Tim Jeans, the chief operating officer of MyTravel‘s airline division. He left in early August.
In a trading update today the company said its results for the year to the end of September should show a 'significant' improvement in its balance sheet.
Chief executive Peter McHugh said the operating result for the period should show approach break-even.
'We are making good progress towards achiveing the turnaround and we are targeting a further trading improvement in 2004/05.'
He admitted that the UK summer market this year had got off to a difficult start but insisted that it had improved.
'The UK division will be profitable for the summer season. While it will still show a loss, its performance will be significantly better than in 2003.'
McHugh said he believed Northern Europe and North America would be profitable for the current year.
He added: 'I am confident that the company will emerge from the restructuring process with a significantly improved balance sheet that will give us a sound basis for the health of the business.'
