Nabarro advises on administration of Lowcosttravelgroup
15 July 2016
This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.
Nabarro is advising restructuring and recovery specialists from Smith & Williamson LLP and CMB Partners UK Ltd, who have been appointed as joint administrators to the global travel business Lowcosttravelgroup. The administrators have been appointed to the parent company, Lowcosttravelgroup Limited, and several subsidiaries.
The group operated a global travel agency business from headquarters in the UK and offices in Spain, Switzerland and Poland. It was one of the biggest sellers of hotel accommodation and holidays worldwide, with a 500 strong workforce. Its annual transaction values were in the region of £500 million and it arranged flights for more than 3 million customers annually.
The group ceased trading on 15 July 2016, following exhaustion of attempts by the group's directors to turnaround its financial difficulties. The directors have cited a combination of factors which contributed to the group's demise, including increased competition, the negative effects of terror threats on bookings and, more recently, the impact of Brexit. The uncertainty in the run up to Brexit caused some customers to delay holiday decisions and the devaluation of the pound since the decision to leave the EU has made overseas travel more expensive for the British public (which represented 60% of the group’s customers).
The administrators will consider any offers for the assets under their control and seek to maximise returns to creditors.
The Nabarro team is being led by restructuring partner Glen Flannery, assisted by a wider team including partner Tracey Marsden, senior associate Morgan Bowen and associate Emily Pepper.
Restructuring & Insolvency partner, Glen Flannery, commented:
"The full effects of Brexit have yet to play out, but less than one month since the outcome, it is being cited as a contributing factor in some business failures, particularly in sectors sensitive to discretionary consumer spending and currency fluctuations. Travel is one of those sectors in which there may be more distress."