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Last Updated: Wednesday, 24 November, 2004, 13:46 GMT
MyTravel to rework rescue package
MyTravel can relax a bit if it cuts its debt burden
Holiday firm MyTravel is preparing its second visit to the High Court in a single day to try to get its rescue plan approved.
On Wednesday morning, a judge threw out its initial proposal on a technicality.
But he agreed with the firm that it does not have to give bondholders - who oppose the plan to restructure £800m ($1.47bn) of its debt - a vote.
The firm, whose brands include Airtours and Going Places, is due to present a revised plan to the court at 1400.
It wants to restructure £800m of its debt through an equity swap, which will leave the bondholders with an 8% stake.
A shareholder meeting will be held in December and the restructuring will be in place by the end of the year, the company said.
"The court has vindicated the company's decision to pursue the scheme of arrangement," the company said.
Failed ambitions
MyTravel has offered the bondholders an 8% stake in the restructured company, with shareholders getting 4% and the rest - 88% - for its lenders.
The company, which raked up huge debts after an unsuccessful expansion drive, had earlier warned the bondholders that it may halve their stake to 4% if forced to seek permission for the scheme from the courts.
Its bondholders, including Fidelity, Societe Generale, Lehman Brothers, and New Star Asset Management, have argued that MyTravel does not have the legal right to take such action.
In addition to its failed expansion efforts, MyTravel was also hit by accountancy errors, and suffered heavily from the post-September 11 downturn in travel.
The slump left the firm with high costs and many unsold holidays, and despite efforts to cut expenses by shedding thousands of jobs and selling businesses its debt mountain has grown.