Business travel giant CWT to file for Chapter 11 bankruptcy protection
The travel agency is joining with Hertz, Worldstrides and several airlines in taking this particular route to weather the financial storm caused by the pandemic.
Business travel agency CWT has said it is planning a prepackaged Chapter 11 filing in the United States to secure a complex $ 1.5 billion refinancing deal.
Overall, he offered a restructuring deal with creditors to allow him to offload $ 900 million in debt.
Chapter 11 is a form of bankruptcy that involves a reorganization of the business affairs, debts and assets of a debtor, and has already been adopted by several travel agencies to deal with the difficult business conditions associated with the pandemic.
“We plan to use a court-supervised ‘pre-packaged’ process to implement the deal on a fast-track basis in the coming weeks while continuing to operate normally. We look forward to moving forward as a fundamentally stronger company, ”said a spokesperson for CWT.
The news is the latest in a series of bankruptcy filings and travel restructuring.
Car rental giant Hertz filed for Chapter 11 bankruptcy in May 2020, coming out in June this year, after working with co-sponsors Certares Management and Knighthead Capital Management.
In July of last year, US educational travel specialist WorldStrides entered Chapter 11 protection, which it released in October.
Airlines have also taken refuge in court protection, especially those operating in Latin America, including the region’s largest, LATAM, as well as AeroMexico.
“CWT is taking steps to implement our previously announced agreement with our financial partners which will significantly strengthen our financial position, provide substantial liquidity and reduce our debt by approximately 50 percent,” the spokesperson added. “We already have massive support for the agreement from our financial stakeholders representing 100 percent of our banking group and holders of over 90 percent of our outstanding secured debt.
The agency did not respond to a request from Skift regarding when it planned to exit bankruptcy protection in time for publication. But, according to reports, it will be finalized by the end of this month.
Speaking to Skift in September, CEO McKinney Frymire said having more than 90 percent of debt holders in the deal demonstrates financial stakeholder support for the company.