Travelex today announced the launch of third tap process for 2021.
As set out in the Q2 results, Travelex has been in discussions with shareholders about funding for the balance of 2021 as the travel industry continues to recover from the impact of COVID-19.
The launch of a third funding tap for 2021 for £15 million intends to support the New Travelex Group’s liquidity through the recovery phase, to ensure the business is sufficiently capitalised to capture returning travel through western hemisphere markets over the balance of 2021.
The company says it is currently in conversations with its existing shareholders as well as third party financing sources to assist in funding ongoing liquidity requirements associated with an improving travel environment.
Let’s recall that Travelex’s H121 revenue stalled at 10-20% of 2019 levels in most key territories, driving a monthly average operating loss of (£7m) per month. Ongoing investment in IT and the costs of operational restructuring meant that overall average cash burn in H121 was (£9m) a month.
As travel volumes have recovered over the Western Hemisphere, operating losses have fallen to (£4.4m) in July and (£2.9m) in August, however at a trading level, the business was breakeven for the first time since 2019 in August with £1m in EBITDA despite the pressure from APAC. Most geographies are breakeven at between 20-30% of 2019 revenue levels before any overhead allocations, reflecting the focus on driving the far- reaching cost reduction programmes.
Travelex is also seeking shareholder and noteholder consent to amend and/or waive the current 30 September 2021 delivery date for audited accounts included in the existing notes documentation and shareholders’ agreement as a result of residual audit complexity, with the new delivery date being 30 November 2021.