Banks 'baling out on MyTravel'

TROUBLED holiday firm MyTravel is on the brink of bankruptcy, despite having won backing from bondholders for a £1.3bn debt refinancing deal.

The deal is expected to be announced on Monday, but industry sources warn that the company's bank debt is being sold more cheaply than Marconi's was before the collapse of the telecoms firm in 2001. MyTravel needed three-quarters of bondholders to agree to extend the length of their bonds from 2004 to 2007.

The bondholders will take 26% of the company's equity and increased interest on the bonds. The company said the deal meant it could concentrate on cutting costs and selling assets.

But industry sources said debts were at crisis levels and the company could be bankrupt by next month. One source said: 'The banks are baling out, selling MyTravel's debt on for just 20p in the pound. There is little support for the company.'