30th Sep 2013 10:50
LONDON (Alliance News) - Travelzest PLC, which is completely reliant on bank funding to keep trading, Monday said lender Elleway Acquisitions Ltd had agreed to extend its on-demand working capital facility until October 7, giving it another week to try and find a longer-term solution to its debt crisis.
At the start of the month, Barclays passed on the company's debt to Elleway Acquisitions Ltd, which said that it supported the company's strategy and would provide a working capital facility until the end of this month when it would reassess the company's position.
The online travel agent is struggling with its debt pile. Barclays had been extending its facilities, but was reassessing the situation regularly. Travelzest had wanted to renegotiate the terms of its loans and banking facilities back in July because interest payments were hitting earnings. The company called the situation unsustainable, and is trying to find other sources of funding so it can refinance and make new investments.
Travelzest cautioned that Elleway Acquisitions could call in its debt at any time and that it still has to comply with the terms on its banking facilities.
It said it would update the market in due course.
The company's shares were up 71.7% at 1.185 Monday morning, the biggest gain on AIM.
By Steve McGrath; [email protected]; @SteveMcGrath1
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