MyTravel agrees bondholder deal

BELEUGUERED holiday group MyTravel said today that it has reached agreement with its bondholders on restructuring its balance sheet. The long-awaited agreement will prove a relief for shareholders after a protracted dispute. The stock rose 0.37p to 5.85p in early trading.

The company had wanted to wipe out £800m in liabilities but only a handful of bondholders agreed to the move, sparking fears that the issue would end up in court.

Today the company announced that the Ad Hoc Committee of bondholders, which consisted of four unnamed institutions and 20 individual investors, had agreed to support the plan in principle. The measures will now go to a vote of the wider bondholder group at a meeting on 29 December.

Meanwhile, MyTravel is seeking confirmation from the banks and other financial institutions participating in the restructuring of their agreement to this new, revised proposal. Under the revised plan, bondholders will receive 8% of the company's shares after restructuring. Bondholders will be paid interest on their bonds accruing up to and including 25 August 2004.

The committee of bondholders agreed to halt its legal challenge to MyTravel's original plan. The company said it will continue to seek court approval for the original plan, but will not seek to make it effective if all the bondholders vote to approve the revised plan.

A spokesman for the bondholders said: 'The committee decided to support the consensual restructuring following MyTravel's decision that it would no longer seek a ruling on whether the bondholders have an economic interest in MyTravel.

'The bondholders have always been open to a consensual deal, and are pleased that their issues with the company have now been resolved.'

A spokesman for MyTravel said the company was pleased to have been able to reach the agreement with the last remaining creditor group of the business. 'The restructuring is nearing completion and will provide a sound foundation for the future of the Group,' he added.

The holiday firm had warned that if the financial restructuring was not agreed, it could have faced having its licence revoked by the Civil Aviation Authority. Existing investors now stand to have their holdings diluted to 4% of the new company and the banks will take the remainder.