NZ agents seek assurances that MFS/Stella customer money is safe
A report in New Zealand’s Sunday Star Times says that Kiwi travel agents are seeking assurances that millions of dollars of customers’ money is safe in the wake of failing giant Gold Coast property group MFS.
MFS, through its subsidiary Stella Travel Services, owns New Zealand travel wholesalers Gullivers and Go Holidays, which supply travel packages to United Travel and Holiday Shoppe customers and corporate management companies Atlantic & Pacific American Express and Hogg Robinson Group.
Industry insiders estimate Gullivers and Go Holidays turn over between $40 million and $60m a month and fears have risen that should MFS collapse, the hundreds of New Zealand travellers who have paid for, but not received, air tickets from travel retailers affected by the possibility of MFS going belly up might find their money frozen.
Even worse, vouchers issued for land travel packages – typically about three times the cost of air tickets and including accommodation, food, theatre tickets, rental cars – might not be accepted by voucher issuers.
MFS is still in business and is casting about the market for a buyer for all or part of Stella, with an announcement expected this week, says Stella’s Australian travel group CEO, Keith Stanley.
MFS was suspended from trading on the Australian Stock Exchange on Wednesday and its share price has dropped from around $A6 late last year to A99c. It is carrying $A1.68 billion in debt and its $A800m overdraft is near its limit.
Stanley says Stella’s travel funds are “totally secure”, have been placed in trust accounts in New Zealand and are “totally separate” from Stella’s operating expenses. Stanley says in the unlikely event that MFS collapses into receivership, Stella “would not be caught up”.
However, United Travel chairman Craig Corbett is concerned about the uncertainty and conflicting reports about the finances of MFS/Stella and has asked Stella’s New Zealand boss, Phil Turner, for confirmation that all Kiwi travellers’ money is safe.
United has 97 branded stores in New Zealand – each individually owned although Stella holds 50 per cent of the franchise agreement.
Holiday Shoppe runs 18 Stella-owned stores and another 50 are franchised under the Stella brand.
A Report by The Mole from The Sunday Star Times
John Alwyn-Jones
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