Tour operator to warn bondholders

British tour operator MyTravel is set to warn bondholders that a key industry regulator could withdraw its licence unless they quickly agree to an £800m (€1.1m) debt restructuring, it was reported today.

The Sunday Times said a circular will be issued tomorrow, stating that the deal must be completed before the Civil Aviation Authority’s annual review at the end of the year.

It is understood bondholders will have until Tuesday to agree on terms, or the group will go to court on Wednesday to force a deal through.

Under the planned life-saving overhaul, £800m (€1.1m) of unsecured debt will be swapped for equity. This will leave banks with 88% of the newly-shaped group, shareholders with just 4% and bondholders with 8%.

If MyTravel goes to court, bondholders could see their holding cut to just 2%.

The company, formerly known as Airtours, already issued a warning to bondholders at the start of the month as it explained the contingency plans in place to ensure the overhaul is completed by the end of the year.

MyTravel, which includes the Going Places and Cresta brands, has sold a number of businesses, including its German operation and its loss-making fleet of cruise ships, and cut 2,000 jobs since the emergence of problems two years ago.

It confirmed last month that it was on course to break even at the operating level in the financial year to September 30, after racking up losses of £365.6m (€523.6m) previously.