BRITAIN’s third-largest holiday company, XL Leisure Group, is in urgent talks with its banks after plans for a refinancing hit delays.
The group’s lenders, Barclays and the Icelandic group Straumur, are understood to be considering their options this weekend. Airline-industry sources said that Barclays had recruited Kroll, the corporate-restructuring specialist, to advise. The sources said the future of the group could be decided this week.
The company is understood to be looking for a new lender after Barclays pulled financing associated with fuel-hedging positions on August 14.
XL, which underwent a management buyout in 2006, has grown quickly to become a big player in the UK holiday market behind the two dominant firms Tui Travel and Thomas Cook. XL Air-ways, its airline, flies to more than 50 destinations. It sells holidays under a diverse range of brands including Kosmar, XL.com, Freedom Flights and Travel City Direct.
A company spokesman confirmed yesterday that “third parties” had been engaged as part of its planned refinancing. “We have no further comment on the specifics of the refinancing. While acknowledging it is a challenging market, the XL Leisure Group is experiencing strong trading, with bookings for 2009 already outperforming last year.”
Surging oil prices and shaky customer demand have made it a tough year for airlines. Last week Zoom, a low-cost transatlantic airline founded by Scottish entrepreneurs Hugh and John Boyle, said it would go into administration, stranding passengers. Industry sources said the company had been in discussions to receive funding from a consortium of investors.