Corporate Travel Giant CWT to File for Chapter 11 Bankruptcy Protection

Corporate travel agency CWT said it is planning a pre-packaged Chapter 11 filing in the U.S. to complete a complex $1.5 billion refinancing deal.

Overall, it has proposed a restructuring agreement with creditors to allow it to offload $900 million of debt.

Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor's business affairs, debts and assets, and has already been adopted by several travel companies to weather tough pandemic-related trading conditions.

“We plan to use a ‘pre-packaged’ court-supervised process to implement the agreement on an expedited basis in the coming weeks while we continue operating normally. We look forward to moving ahead as a fundamentally stronger company,” a spokesperson for CWT said.

The news is the latest in a string bankruptcy filings and restructuring in travel.

Car rental giant Hertz filed for Chapter 11 bankruptcy protection in May 2020, exiting in June this year, after working with co-sponsors Certares Management and Knighthead Capital Management.

In July last year, U.S. educational travel specialist WorldStrides entered Chapter 11 bankruptcy protection, which it emerged from in October.

Airlines too have sheltered under court protection, particularly those operating in Latin America, including the region’s largest, LATAM, as well as AeroMexico.

“CWT is taking steps to implement our previously announced agreement with our financial partners that will significantly strengthen our financial position, provide substantial liquidity and reduce our debt by approximately 50 percent,” the spokesperson added. “We already have overwhelming support for the agreement from our financial stakeholders representing 100 percent of our bank group and holders of over 90 percent of our outstanding secured debt.

The agency did not respond to a request from Skift about when it expected to exit the bankruptcy protection in time for publication. But, according to reports, it is be finalized by the end of this month.

Speaking to Skift in September, CEO McKinney Frymire said that having over 90 percent of the debt holders in the agreement demonstrated the support the financial stakeholders had for the business.