Foreign exchange firm Travelex has collapsed into administration, with the immediate loss of more than 1,300 jobs.
Advisory firm PwC has been appointed to carry out a complex restructuring deal and pre-pack administration, which allows buyers to cherry-pick the best assets and ditch those they don’t want.
The administrators said the impact of a cyber-attack in December and the ongoing Covid-19 pandemic had “acutely impacted the business.”
A special purpose vehicle made up from a group of its creditors have bought the UK business, which serves major corporate and supermarket customers and the ATMs located outside UK airports. They have also acquired Travelex operations in Brazil, Middle East and Turkey, Nigeria and Asia Pacific.
However, a number of other locations have not been sold, including some of its airport sites, as the majority of the UK retail business is no longer trading. The foreign currency business has been hit hard by the travel restrictions imposed as a result of the Covid-19 pandemic.
PwC said 1,309 jobs had been axed as a result, but that more had been saved by the pre-pack deal.
Toby Banfield, joint administrator at PwC, said: “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.”
The deal has slashed the group’s debts form £385m to just £160m, and £84m of new cash has been injected into the business.
It comes six months after the company was attacked by ransomware hackers at the turn of the year. The attack caused a month of disruption, and at times staff could not use computers to keep track of their currency trading. The breach disrupted online travel money services for clients including Royal Bank of Scotland, Barclays, Tesco Bank and Asda.
As part of the deal, Travelex chief executive Tony D’Souza will be replaced by “turnaround specialist” Donald Muir.
D’Souza said: “I am very pleased to announce this transaction. On completion it will be the appropriate moment for me to step down as CEO as New Travelex moves into the next phase of its development.
“I also want to thank all of Travelex’s employees, whose commitment to the business has been exceptional throughout this difficult period.”
