The pandemic is taking its toll on the finances of all sectors of the travel industry, battered by border closures and the absence of international travellers. Several major players in the business travel sector - Eurostar in the rail sector, La Compagnie in the air sector and Hertz in car hire - have recently found solutions to put their finances back on track, meet their obligations and a brighter outlook for the recovery.
So Has Eurostar announced the conclusion of a refinancing agreement? with its shareholders and banking partners amounting to...
The pandemic is taking its toll on the finances of all sectors of the travel industry, battered by border closures and the absence of international travellers. Several major players in the business travel sector - Eurostar in the rail sector, La Compagnie in the air sector and Hertz in car hire - have recently found solutions to put their finances back on track, meet their obligations and a brighter outlook for the recovery.
So Has Eurostar announced the conclusion of a refinancing agreement? with its shareholders and banking partners amounting to £250 million, or more than €290 million. This will take the form of equity capital and new bank loans guaranteed by its shareholders, which include SNCF - which holds half of Eurostar's shares - the Patina Rail consortium and the Belgian railway company SNCB. This support is obviously intended to ensure the long-term viability of cross-Channel rail services, at a time when Eurostar will be increasing its service from 27 May to two daily return trips on the London-Paris route, followed by a third service from the end of June.
" The strong financial commitment of our shareholders, together with our banks, is the key factor that will enable us, in the immediate term, to ramp up our business as the expected improvements in pandemic management are achieved." said a satisfied Jacques Damas, Eurostar's Managing Director. "SNCF Voyageurs is delighted with this refinancing, which is a major step for ensure the future of Eurostar and travel between the continent and the UK" said Christophe Fanichet, CEO of SNCF Voyageurs. As well as securing the company's finances, this refinancing should also put Eurostar's merger with Thalys back on track, and their reunification into a unified European TGV company, as part of the Green Speed project announced for 2019.
Another travel industry player recently relieved, this time by obtaining a State Guaranteed Loan, La Compagnie intends to resume its 100% business class Paris-New York flights.This line has been interrupted since spring 2020. An initial State Guaranteed Loan of €10 million had already been obtained in June 2020. But the prolonged closure of international borders prevented flights from resuming as hoped, which meant that new liquidity was needed. This is despite the fact that, in the meantime, La Compagnie has sought to diversify its business to find other sources of revenue, in particular by operating charter flights around the world since mid-2020.
This has now been achieved, as La Compagnie has been granted a new PEG of 10 million euros, in addition to a new capital injection from its shareholders. " Obtaining this second State Guaranteed Loan is a guarantee of recovery for La Compagnie. (...) We are now in the home stretch of our preparations for the takeover and are looking forward to offering our customers the very best in business class." said Christian Vernet, Chairman of La Compagnie. This service should resume on a regular basis between Paris and New York in June 2021. and early July 2021 between Nice and New York, with the flight schedule still on hold pending confirmation of government announcements on the reopening of international borders.
Car hire, the lack of international travellers has also put a strain on rental companies' finances, pushing most of them to the brink of bankruptcy. At the end of last year, for example, Europcar had to be placed under a safeguard procedure, before being restructured at the beginning of the year. Same causes, same effects for Hertz, which in May 2020 filed for Chapter 11 protection in the United States because it could not find the $400 million needed to finance its fleet. A sale process then got under way, which has also just come to an end with the takeover of the leasing company by the American investment funds Knightshead and Certares, which will recapitalise Hertz to the tune of almost six billion dollars. Already a shareholder in Amex GBT and the Marietton group, owner of Selectour and Havas Voyages, Certares is strengthening its position in the world of business travel.
