PwC organises pre-pack deal for Travelex
12 Aug 2020
PwC has been called in as administrators to the Travelex group and has completed a pre-pack deal involving a complex restructuring which will reduce the debt burden at the foreign exchange operator, but will see over 1,300 UK-based employees lose their jobs
12 Aug 2020
Toby Banfield, David Kelly and Edward Macnamara of PwC have been appointed as joint administrators of Travelex Holdings Limited (THL), Travelex Ltd (TL), Travelex UK Ltd (TUK), Travelex Group Investments Ltd (TGI) and Travelex Financing (TFP). Travelex Banknotes Ltd (TBL) previously entered administration in July.
The Travelex Group is the global market leader in cash foreign exchange services. It trades in over 80 currencies and operates in more than 50 countries, both online and through a network of over 1,000 stores including major airports, with more than 1,000 ATMs around the world.
The group also provides outsourcing services for partners including banks, supermarkets and travel agencies, extending its reach to over 60 countries.
At the start of the year, Travelex revealed it was being held to ransom by hackers demanding $5m (£3.8m) after a cyber-attack meant the business has had to turn off all computer systems and carry out processes manually.
Subsequently Travelex’s owner, FTSE 250-listed Finablr, saw its shares suspended after discovering accounting problems including $100m of undisclosed cheques.
The ongoing Covid-19 pandemic has also acutely impacted the business.
PwC said the restructuring deal has delivered £84m of new money and substantially delevered the new group. This was implemented through a pre pack administration sale of certain entities and assets to the company’s senior secured noteholders.
In the UK, the acquisition largely comprises the UK wholesale and outsourcing businesses that service major corporate and supermarket customers in addition to the UK ‘non airport’ ATM estate.
The purchaser is Travelex Acquisitionco Ltd, a special purpose vehicle controlled by the noteholders to the global Travelex Group.
However, various airport and non-airport locations have not been sold, as the majority of the UK retail business is no longer trading. This is also true of various retail and airport locations internationally.
Toby Banfield, joint administrator and PwC director, said: ‘The completion of this transaction has safeguarded 1,802 jobs in the UK and a further 3,635 globally, and ensured the continuation of a globally recognised brand.
‘Unfortunately, as the majority of the UK retail business is no longer able to continue trading, it has regrettably resulted in 1,309 UK employees being made redundant.’
In a statement, Travelex said under the terms of the transaction, the new Travelex group will be significantly deleveraged with financial indebtedness being reduced from over £385m to £160m. Following completion of the transaction, Tony D'Souza will step down as CEO of Travelex and be replaced by turnaround specialist Donald Muir as CEO of New Travelex.
Muir said: ‘New Travelex will have a substantially delevered capital structure, £84m of new liquidity and supportive institutional shareholders.
‘While there is much to do, my experience in recent weeks has given me confidence that there is a strong team that is passionate about achieving a successful turnaround.
‘I share their commitment, and look forward to leading them in the delivery of our plan to ensure that we are well placed to capture the expected growth in revenues as global travel volumes return.’