Travelport, the travel-booking platform co-owned by Siris Capital and activist investor Elliot Management, borrowed $500 million from its owners in a loan secured in May against the company’s core intellectual property, valued at about $1.15 billion, as Skift reported. The owners ring-fenced Travelport’s intellectual property, denying it as collateral for Travelport’s creditors.
The assertive move worked. Travelport said Thursday that its lenders have abandoned their gripes about a wrongful grab of collateral and will provide $500 million in new funding to the company by September 24. This will repay the $500 million invested by the owners in June. Lenders took a “haircut,” too. Travelport successfully haggled for lower debt levels, longer timetables for paying that debt, and better interest rates.
“With this agreement, we have fortified our ability to continue to strengthen and protect our business from the impacts of the extraordinary Covi-19 global health crisis,” said Travelport CEO Greg Webb in a statement.
The new financing will provide the company with liquidity to avoid defaulting on its debts and invest in its technology and next-generation platform.
Travelport’s owners had filed a lawsuit in New York state court in June asking a judge to okay its unusual rescue financing, with the lenders having filed litigation against them. Presumably Travelport’s legal arguments, represented by law firm Wachtell, Lipton, Rosen & Katz, looked likely to win the day. For a backstory, see our earlier article.
Travelport now turns its attention to a UK trial to save its $1.7 billion sale of payments firms eNett and Optal to Wex, a transaction on the edge of failure due to the pandemic. Travelport has told the court it needs the case resolved by October 27, the date a debt commitment to fund the acquisition ends.