24 hours until MyTravel decision
MYTRAVEL will learn within 24 hours whether it must go to the high court to force through its financial rescue package. Bondholders of the crisis torn operator will tell management tomorrow whether they will back the £800 million restructuring that could save the company from insolvency. If not – and bondolders are said to be angry and disillusioned amid claims they have not been fully consulted – MyTravel will be forced on Thursday to ask the high court to order a “scheme of arrangement” – effectively overruling the bondholders decision. In a circular to bondholders, MyTravel chairman Michael Beckett outlined in the starkest terms the possible implications if the scheme is not accepted. “The board believes that if the company is not able to restructure its balance sheet in a timetable acceptable to the CAA it is inevitable that the company will cease trading and enter into insolvency proceedings,” he said. Under the restructuring, bondholders will receive 8% of the company with 4% going to shareholders and 88% to creditor banks. If the operator has to apply to the high court however, the package would change, leaving bondholders with just 2%. MyTravel refused to be drawn on the outcome but sources close to the company said they were confident bondholders would accept. “If they go to the high court bondholders will receive a quarter of the existing deal and if the company ceases trading they will, in all probability, get nothing,” said one source. The renewed anxiety comes at a time when sales are looking increasingly healthy. Beckett said in the circular that the group would break even for the 12 months ending September 30 with its Europe and North American business showing a profit. The UK division meanwhile will show a profit for the summer season but is expected to report a loss overall.
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