Travelex, the travel exchange firm owned by Finablr Group of BR Shetty has agreed towards providing its lenders full ownership of the company in return for a debt reduction and a capital infusion of $105.3 million.
The UK-based company said the deal would also see its debt reduced by 84% as secured senior notes would be converted to equity.
After the proposed restructuring Travelex will be divided into two businesses. The Initial FundCo will focus on serving wholesale markets of foreign exchange while the Optional FundCo will direct its attention towards the European and UK 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 Tony D’Souza, Travelex’s chief executive.
Travelex has experienced problems in recent months, beginning with a cyber attack on New Year’s Eve that brought down many of its systems.
The COVID-19 pandemic that took away most of its airport customer base and the liquidity constraints caused by the failure of Shetty’s NMC Health’s business administration further added to the blow.
In April, due to being at risk of default following a “near term liquidity deficit”, the firm put it up for sale.
But it said last month that its creditors had found none of the offers received for the company acceptable while more than two-thirds of senior secured noteholders at the firm approved the restructuring.
Initial Fund Co will include the wholesale and outsourcing arms of Travelex and its the Middle East and Turkey, Nigeria, Asia Pacific, and Brazil retail businesses.
The OFC company will have its distribution arms in the UK, Europe, and North America.
“I want to thank all of Travelex’s employees who have continued to work tirelessly through this challenging period,” Mr. D’Souza said.
Indian businessman and Founder NMC Health, Mr. BR Shetty bought Travelex in 2014.