Partnerships / Acquisitions

Travelex Ditches Sale After Banks Reject Offers

Foreign exchange giant Travelex is pulling its offer of sale to prospective buyers after none of the buyers could offer an acceptable deal to the company’s banks and lenders, Financial Times (FT) reports.

The company will now likely head toward a debit-for-equity swap to look at a new way of financing itself, according to people close to the discussions interviewed by FT.

The company issued a statement Monday (June 15) saying that it had received numerous non-binding offers, but that none of them had proved satisfactory.

Instead, now, the company will continue talking with its banks, including Barclays, JPMorgan, Bank of America, Merrill Lynch, Goldman Sachs and Deutsche Bank, and advisors PwC, and will continue to look at ways to move forward into the future, FT reports.

Travelex has had a rough time of it this year, coming into 2020 roiled by a hacking scandal that forced it to close websites in 30 countries to protect data. The company reportedly paid $2.3 million to get the websites back online.

The coronavirus pandemic then further decimated the company's revenues as it shut down travel worldwide, a crushing blow for a company that draws revenue from airports, tourism and in-person commerce.

The company's troubles were also compounded by parent company Finablr's issues, in which undisclosed financing and other troubles saw it on the verge of collapse earlier this year.

Travelex's capital structure was described as "unsustainable" in its present state by rating agency S&P, citing weak liquidity and highly leveraged capital structure, with €360 million in debt to bondholders and a revolving credit facility of  €90 million, FT reported.

The company said Monday that it has a temporary waiver from around 70 percent of the holders for its senior secured notes. That should give it time to figure out how it will go about its financial restructuring, and also avoid breaching the terms of its debt. The company already failed to pay around €14.4 million in interest that was due May 15.

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