Travelex strikes rescue deal, but 1,300 UK jobs to be cut

Travel money firm Travelex has struck a deal to stay afloat, but with the loss of more than 1,300 jobs in the UK.

Administrators PwC said the impact of a cyber-attack followed by the coronavirus crisis had “acutely” hit the company.

It said that a complex restructuring deal completed on Thursday had delivered £84 million of new money through a “pre-pack administration sale” of certain entities and assets.

The purchaser is Travelex Acquisitionco Limited, a special purpose vehicle controlled by the Noteholders to the global Travelex Group.

A pre-pack administration sale is when a company arranges a deal to sell its assets to a buyer before appointing administrators to facilitate the sale.

Toby Banfield, joint administrator at PwC, said the sale had saved 1,802 jobs in the UK, but 1,309 UK employees will be made redundant.

He added: “We would like to thank the employees, management team and all stakeholders who have been an integral part of the Travelex business for their tireless efforts.

“Against the challenging backdrop of the pandemic and current economic climate, they have helped to deliver a highly complex restructuring, enabling a core part of the business to continue operating under new ownership.

“The completion of this transaction has safeguarded 1,802 jobs in the UK and a further 3,635 globally, and ensured the continuation of a globally recognised brand.

“Unfortunately, as the majority of the UK retail business is no longer able to continue trading, it has regrettably resulted in 1,309 UK employees being made redundant today.”

On New Year’s Eve, Travelex was the target of a high-profile hack and reportedly paid out 2.3 million dollars (£1.8 million) in January to the notorious REvil ransomware gang.

The attack left its systems down for weeks, forcing the group to resort to pen and paper across its branches.

PwC said that the subsequent Covid-19 outbreak had created “considerable uncertainty” on future financial performance and the spread of the virus resulted in a sharp decline in air passenger numbers – impacting global travel.

The Travelex Group trades in over 80 currencies and operates in more than 50 countries, both online and through a network of more than 1,000 stores including major airports, with more than 1,000 ATMs around the world, PwC said.

The group also provides outsourcing services for partners including banks, supermarkets and travel agencies, extending its reach to more than 60 countries, it added.

The joint administrators will be writing to creditors in the next few weeks to provide further information on the restructuring and the impact on creditors, PwC said.