Foreign exchange company Travelex agreed to a deal that will see its lenders take full control of the business in return for a debt restructuring and an £84 million (Dh386.8m/US$105.3m) cash injection.
The UK-based company, which was owned by BR Shetty’s Finablr Group, said the deal would also see its debt reduced by 84 per cent as €360m (Dh1.49 billion) worth of senior secured notes would be converted into equity.
The restructuring will see the company split into two businesses – an Initial FundCo arm focused on servicing the wholesale foreign exchange market and an Optional FundCo business focused on its UK and European retail markets.
“The restructuring will provide Travelex with a stable platform through £84m of new liquidity and a substantial debt reduction, so that it can rebuild revenues under the stewardship of its new shareholders,” said Travelex’s chief executive, Tony D’Souza.
Travelex has suffered problems in recent months, starting with a cyber attack that took down many of its systems on New Year’s Eve.
That was accompanied by liquidity constraints caused by the collapse into administration of Mr Shetty’s NMC Health business, and the Covid-19 pandemic, which took away much of its customer base at airports.
The company was facing a "near-term liquidity shortfall" that put it at risk of a default and put itself up for sale in April.
But it said last month that none of the offers received for the business had been deemed suitable by its creditors.
The restructuring was approved by more than two thirds of the company’s senior secured noteholders.
The IFC business will contain Travelex’s wholesale and outsourcing arms, and its retail businesses in the Middle East and Turkey, Asia Pacific, Nigeria and Brazil.
The OFC business will contain its UK, European and North American retail arms.
About £15m in bridge financing has already been provided to Travelex before its restructuring, which is expected to take place next month, the company told investors.
“I want to thank again all of Travelex's employees who have continued to work tirelessly through this challenging period," Mr D'Souza said.
"I am also grateful to our secured lenders and all of our stakeholders for their continued support as we reach this milestone and look forward to the successful completion of the transaction."
Travelex also reported first-quarter results for 2020, which showed the scale of its liquidity challenge.
Revenue fell 36 per cent to £111.9m in the first quarter as it reported a £42.4m loss on earnings before interest, tax, depreciation and amortisation.
Cash outflows meant its net debt rose to £331.9m by March 31, up from £214.1m three months earlier.
Travelex was bought by BR Shetty for £1bn in 2014.
It was a key part of his Finablr group of foreign exchange and digital payments companies that listed on the London Stock Exchange in May 2019, in a deal that valued the group at £1.23bn.
But the group reported liquidity problems that led to the UAE Central Bank stepping in to oversee operations at its UAE Exchange business in March.
By the time its shares were suspended on March 16 its value had fallen to £77.2m.
In May, the company told the London Stock Exchange that its debt was $1bn higher than the previously reported $334.1m.
The five pillars of Islam
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Mohammed bin Zayed Majlis
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
%3Cp%3E%3Cstrong%3EProcessor%3A%3C%2Fstrong%3E%20Apple%20M3%2C%208-core%20CPU%2C%20up%20to%2010-core%20CPU%2C%2016-core%20Neural%20Engine%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EDisplay%3A%3C%2Fstrong%3E%2013.6-inch%20Liquid%20Retina%2C%202560%20x%201664%2C%20224ppi%2C%20500%20nits%2C%20True%20Tone%2C%20wide%20colour%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMemory%3A%3C%2Fstrong%3E%208%2F16%2F24GB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStorage%3A%3C%2Fstrong%3E%20256%2F512GB%20%2F%201%2F2TB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EI%2FO%3A%3C%2Fstrong%3E%20Thunderbolt%203%2FUSB-4%20(2)%2C%203.5mm%20audio%2C%20Touch%20ID%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EConnectivity%3A%3C%2Fstrong%3E%20Wi-Fi%206E%2C%20Bluetooth%205.3%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBattery%3A%3C%2Fstrong%3E%2052.6Wh%20lithium-polymer%2C%20up%20to%2018%20hours%2C%20MagSafe%20charging%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECamera%3A%3C%2Fstrong%3E%201080p%20FaceTime%20HD%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EVideo%3A%3C%2Fstrong%3E%20Support%20for%20Apple%20ProRes%2C%20HDR%20with%20Dolby%20Vision%2C%20HDR10%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAudio%3A%3C%2Fstrong%3E%204-speaker%20system%2C%20wide%20stereo%2C%20support%20for%20Dolby%20Atmos%2C%20Spatial%20Audio%20and%20dynamic%20head%20tracking%20(with%20AirPods)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EColours%3A%3C%2Fstrong%3E%20Midnight%2C%20silver%2C%20space%20grey%2C%20starlight%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIn%20the%20box%3A%3C%2Fstrong%3E%20MacBook%20Air%2C%2030W%2F35W%20dual-port%2F70w%20power%20adapter%2C%20USB-C-to-MagSafe%20cable%2C%202%20Apple%20stickers%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh4%2C599%3C%2Fp%3E%0A
German plea
Ukrainian President Volodymyr Zelenskyy told the German parliament that. Russia had erected a new wall across Europe.
"It's not a Berlin Wall -- it is a Wall in central Europe between freedom and bondage and this Wall is growing bigger with every bomb" dropped on Ukraine, Zelenskyy told MPs.
Mr Zelenskyy was applauded by MPs in the Bundestag as he addressed Chancellor Olaf Scholz directly.
"Dear Mr Scholz, tear down this Wall," he said, evoking US President Ronald Reagan's 1987 appeal to Soviet leader Mikhail Gorbachev at Berlin's Brandenburg Gate.
UAE currency: the story behind the money in your pockets
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
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The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
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