Travelex reaches debt restructuring agreement with £84m funding

Maria Nikolova

The transaction will provide the company with £84m of new liquidity and an 84% reduction of its existing financial debt.

Travelex today announces it has reached an agreement with at least 66.7% of its Senior Secured Noteholders (SSNs) and all of its Revolving Credit Facility (RCF) lenders on the terms of a comprehensive debt restructuring.

The transaction will provide the company with £84 million of new liquidity and an 84% reduction of its existing financial debt. The SSNs, led by members of an Ad Hoc Committee of SSNs (the AHC), will take full control of Travelex. New money cash funding of £84 million will be provided by participating SSNs in the form of New Senior Secured Notes.

The AHC will provide an initial commitment through bridge funding of £15 million provided yesterday (to be refinanced by the New Senior Secured Notes), with upsizing flexibility for both the AHC and any participating SSNs wishing to subscribe. There will be full equitisation of the existing €360 million SSNs, and full reinstatement of the existing £50m RCF in the form of a Reinstated Term Loan and about £10 million guarantees in the form of reinstated guarantees (together, the “New RCF”).

SSNs will receive warrants over 17.5% of New Holdco equity at exit. Bridge Funding providers will receive further warrants of 2.5% of New Holdco Equity.

The transaction contemplates the division of the existing Travelex group into two parts:

  • Initial FundCo (“New Travelex”), which will comprise the wholesale and outsourcing business and certain international retail businesses of Travelex abroad (Brazil, Middle East & Turkey, Nigeria and Asia Pacific);
  • Optional FundCo (“Warehouse Travelex”), which will principally comprise certain of Travelex’s retail businesses in UK, Europe and North America.

Many of the New Travelex businesses will be transferred at completion, while certain of these businesses will require regulatory approvals which are expected to be obtained in the coming months. Members of the AHC are expected to control over 50% of the equity of New Travelex.

The transaction is expected to complete by early August.

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