Good News! MyTravel in deal with bankers

[Goforfun]

http://news.bbc.co.uk/1/hi/business/2967844.stm

MyTravel has signed a £1.3bn refinancing deal with its lenders which would allow it to turn the business around.

[skylord757]

Great news today, hopefully the company will now be secure for years to come and get back to profits.

Nice one MyTravel keep fighting :ok:

[fireflybob]

This is excellent news and I wish all those in MyTravel well.

I wonder what conditions the banks have laid down to secure this continuing facility?

[expedite_climb]

The condition is that MT extends the maturity date of it's convertible bonds to December 2006, by the end of sept this year...

[Random Electron]

Would somebody please explain what the implications of Expedite's post are?
(Words of one syllabul please, I'm no financial wizard!)

[kinsman]

No extension to convertible bond, the banks call in the loan! If the banks call in the loan bondholders get nothing. So I guess they will reach an agreement or right off their money.

If they extend I think they can sell the bonds when they go up. I have to confess to not fully understanding the mechanics of these convertible bonds. TUI have one for 500m euros due in January! They seem a dodgy way of raising money to me, a bit of a ticking bomb. A lot of companies have used them inside and outside the aviation world and many seem to have had problems as a result!

All of the above said it looks like there is light at the end of the tunnel and the results are better than I expected given all the bad press, SARS, war etc.

No doubt the Mail and the rest of the press will focus on the negative this weekend in the interests of balanced reporting of course!
:ok:

[bagpuss lives]

Excellent news indeed :)

Having flown MYT only a few days ago I have nothing but good things to say about 'em.

Lets hope that these nasty rumours (in which I've sadly been involved) about the health of MYT can finally be put to bed now? :)

[niknak]

Not sure if it is good news or not, if the banks call in the loans, they know they'll get F**k all, cos' the money has been spent on keeping the company going on a day to day basis, and as has been said, the bond holders had no choice 'cos they would get nothing.

There must come a time when suppliers to the company will get even more neurotic than they already must be, (i understand that MYT were not paying the bills for up to 100 days in some cases), and refuse to do business with them.

If I were a MYT employee, I'd be doing serious research into the job market, cos' there can't be long to go.

[SLT]

NikNak,

Please don't make unfounded speculation on something you know next to nothing about. There have been many rumours about MYT not paying bills, having to pay cash for fuel etc - ALL of which were totally untrue!! And they all came from the inevitable so-called "very reliable source". There has been no instances of companies refusing to do business with MYT to the best of my knowledge. Companies very rarely refuse to do business with anyone - it's not good for business!!! Don't be so gullible!!!! :rolleyes:

[kinsman]

Niknak

I guess you work for the opposition!

[Breeze Block]

Good news. Many more happy years flying to you all.

[tailscrape]

Good news in theory, however if the bond holders (who are mainly greedy vulture funds in this case) do not agree to the terms of any deal that mr McHugh puts together, then my Travel will likely cease trading.

Any deal will probably see a serious dilution of share holder value, leaving my travel in the hands of a group of mainly U.S. hands, who have no interest in the business, only getting a whole load of cash out of it.

Therefore, if MT survive, you will find them being stripped to the bone to reduce costs further to deliver value to the current bondholders....who would of course at that point be the equity holders (any other small shareholder will have wiped their arse with the useless rag share certificate by that time) until such a time as the U.S. funds sell up and do a runner. At that point though, there will be less in MT of worth than there is today.

It will not be easy to see MT survive as they are now. Look at the facts. If no deal is done, then the lights go out........... sad but maybe true.:(

[EPRman]

From todays TravelMole.com

MyTravel 'in crisis talks'

Travel giant confident despite auditors talking of uncertain future

The beleaguered MyTravel has reportedly been having “crisis talks” despite insisting that the health of the company has improved significantly over the last few months.

Saturday’s Guardian newspaper quotes auditors Deloitte and Touche as talking of “uncertainty” regarding the company’s future, and the newspaper talks of millions of package holidays facing cancellation later this year if MyTravel fails to strike a new deal with investors.

According to the paper, MyTravel’s chief executive Peter McHugh “admitted that its survival depended on the outcome of crisis talks with a few dozen City bondholders, who are due to be paid £229 million in January. MyTravel wants them to wait until December 2006”. It continues: “If the bondholders do not agree to the delay by September, MyTravel’s banks have threatened to end their £1.3 billion of support for the company, which would collapse it.”

McHugh insists that such a scenario is highly unlikely, and states that there is “no real reason” for customers to be concerned, adding: “We continue to provide some of the best vacations of the market.”

[newswatcher]

Kinsman, why shoot the messenger?

On Friday, Peter McHugh makes a statement that everything is OK. Journalists discover that the bondholders, accounting for some £220m of "debt", have yet to approve the "deal". :confused:

I don't know who is advising MyTravel on PR, but they don't seem to have got it right yet!

[SLT]

Newswatcher,

It wouldn't be so bad if we could all rely on journalists to provide fair, accurate and balanced reporting. Unfortunately - life ain't like that - the name of the game as we all know is sensationalism and selling papers!!! Journalists didn't "discover" that the bondholders have yet to approve it - it was made very clear in all the company's press releases.

"Commenting on the results for the period and the trading outlook Peter McHugh, Chief Executive of MyTravel Group plc, said: "I am pleased to announce that we have reached agreement for our banking facilities to be extended until May 2006, and are confident that we will be able to resolve the position of the Convertible Bonds."

There has been no "cover-up" and there is nothing new in what these reports are saying. How many other tour operators are being as open about their state of affairs as MYT are now???? Ok, maybe they have to be, but it's a good thing don't you think? OK, the bondholders may not approve it - fine. Then they along with everybody else will lose a lot of money. There is little mileage in them refusing a deal, but who can blame them for wanting to squeeze as much as they can out of it?

It's true that they hold the future of the company in their hands, but at least it's the future of a company that has shown remarkable resilience in the face of extreme negativity, and that has proved that it has a very loyal customer base. There has been many an attempt over the last few months to scare-monger MYT out of business. So far they've failed dismally. I'm feeling more positive now than I have in a long time, and I think you could describe the mood in the company as one of cautious optimism. Let's keep our fingers crossed!!!!! :)

I do agree with you on the PR front - they need a right good kick up the arse!!!!!!:ok:

[newswatcher]

SLT, I appreciate your comprehensive reply. However, in the same press statement, the Chief Executive always saysThere remains some uncertainty over whether this extension to the maturity date of the Convertible Bonds can be achieved in the time available, and if it is not, the refinanced £1.3 billion of debt and contingent facilities would become repayable on demand.

Unfortunately, this has alerted the "vultures".

For everyone concerned, I sincerely hope they overcome their problems.:ok:

[SLT]

Me too mate!!!!!! :ok:

[rupetime]

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There remains some uncertainty over whether this extension to the maturity date of the Convertible Bonds can be achieved in the time available, and if it is not, the refinanced £1.3 billion of debt and contingent facilities would become repayable on demand.
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Agree the payable on demand seems a little concerning - time will tell.

[fireflybob]

As one who has been out of employment in the aviation industry for too long to mention I am extremely pleased to see that MyTravel has a further stay of execution.

I suspect that some of the other airline companies in the UK have been holding back on recruiting in the hope that if/when My Travel cease trading a ready supply of trained, current pilots would arrive on their doorstep gagging for a job and we all know what effect this might also have on pay and conditions, etc.

I sincerely hope that MyTravel survive as a) I have also worked for a company that ceased trading and I would not want my worst enemy to go through the same experience and b) I know they have a dedicated and loyal workforce who wish to see things work out.

I have to say though that things do not look that optimistic but I hope I will be proved wrong.