Travel and leisure - case study
Travel and leisure - case study
- Debt - £10m
- Turnover - £22m
- Number of employees – 30
Situation
Travel business with ongoing trade being materially impacted by Covid-19. Management sought to resolve the financial situation through consensual discussions with Creditors, but required a more formal solution following a winding up petition being lodged by a key trade supplier.
Approach
We were appointed to advise the Group on the options and worked closely with management to prepare an innovative CVA that dealt with:
- Categorisation of trade creditors, offering differing returns based on clear commercial rationale and the date the debts incurred;
- Secured debt and future interest cost compromise, whilst providing additional ongoing additional working capital and funding support;
- Exclusion of commercially sensitive and confidential supplier information from the Proposals with court consent;
- Built in flexibility to deal with the ongoing uncertain economic trading environment, helping to maximise the chances of the CVA being a success over a 3 year period.
Impact
Strong creditor engagement and communication with over 15,000 international customers and suppliers.
CVA successfully approved with 99% creditor support and lending facilities restructured. Outcome ranges to creditors of 50-100p in the £ being significantly higher than a formal insolvency scenario.
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