MyTravel 'close to rescue package'

Beleaguered holiday group MyTravel is close to agreeing a rescue package with creditors, it emerged today.

The Manchester-based company met more than 40 banks last week to discuss a wholesale refinancing plan that will include swapping “a significant portion” of its £1.3bn (€1.97bn) debt for equity in the group, a Sunday newspaper reported.

Other options being considered include an injection of cash into the company by an outside investor and the sale of loss-making joint ventures.

A MyTravel spokeswoman would not confirm whether a meeting of the group and its banks had taken place last week.

But she added: “We do meet regularly with our lenders to keep them up to date with progress.”

A debt-for-equity swap is thought to be under consideration following an improvement in the company’s financial position.

MyTravel has been facing problems including a weaker-than-anticipated UK holiday market, which it said in November would take longer to turn around than expected.

However, in May, it said action to turn the business round was having an effect as it posted a fall in half yearly losses.

The group slashed pre-tax losses to £199.6m (€302.4m) in the six months to March 31 from £617.9m (€936.2m) in the same period last year after cutting 2,000 jobs and selling businesses including its German operation and its loss-making fleet of cruise ships.

Turnover fell to £1.33bn (€2bn) from £1.63bn (€2.5bn), largely due to disposals. Operating losses before exceptionals and goodwill were reduced £149.6m (€226.7m) from £282.7m (€428.4m).

MyTravel confirmed in May that it was looking at options for a debt restructuring, but added that it could result in a “significant dilution” of shareholders’ interests.