MyTravel confident it will beat rebels

THE chief executive of MyTravel today vowed that the embattled tour operator would beat rebel bondholders in its courtroom attempt to pull off a rescue £800m debt restructuring.

Bondholders, including fund management giant Fidelity, are objecting to plans for a debt-for-equity swap that would see their stakes massively diluted. They will face MyTravel at a crucial hearing next week.

But chief executive Peter McHugh declared today: 'The law and the facts are on our side. We expect the major judgments, which have been going our way so far, are totally on schedule. We will complete this restructuring.'

He was speaking as the group reported greatly reduced losses for the past year. Pre-tax losses in the year to 31 October were £190.3m against £910.9m a year earlier. Its Northern European and North American businesses swung into profit. But it was in the UK operations, which make up 60% of the group's business, that McHugh's major surgery appears to be having most impact. Operating losses fell from £325.4m to £59m. Having been crucified in previous years on low-margin package deals, McHugh cut the number of holidays sold to Brits by 13% in the past year and pledged to slash a further 20% to 25% in the coming year.

Early bookings for summer 2005 were down on a year ago due to these cuts but the percentage of holidays available was up, said McHugh. Between the start of last year and the end of 2005, he will have cut MyTravel's plane fleet from 54 to 37 and got rid of all four of its cruise ships.