Travelex reports most of Senior Secured Noteholders accede to Lock Up Agreement relating to debt restructuring proposal

Maria Nikolova

To maximise the possibility for noteholders to access the 50bps Lock Up Consent Fee, Travelex has decided to extend the deadline.

Travelex today announces that 84% of Senior Secured Noteholders have acceded to the Lock Up Agreement relating to the debt restructuring proposal announced by the company earlier this month.

Consequently, in an effort to maximise the possibility for noteholders to access the 50bps Lock Up Consent Fee announced on 7 July 2020, Travelex has decided to extend the deadline from 5pm on 16 July 2020 to 5pm on 17 July 2020.

On July 7, 2020, Travelex said it 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 envisages dividing 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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