The rescue deal to save the highly indebted holiday company MyTravel was yesterday thrown into uncertainty after its finance director suddenly resigned ahead of a crucial meeting with bondholders.
Kazia Kantor, 53, yesterday left the company with immediate effect. She had only been in the post since November, having stepped in from her position as a non-executive director to take the reins when the previous management team resigned.
Bondholders were understood to be very surprised by the move, which comes only three weeks before they are expected to agree a refinancing deal that is vital to securing the future of the company. If MyTravel fails to secure the deal, it will be in breach of its banking covenants and will have to repay £1.3bn of debt.
Analysts, too, were concerned at the sudden timing of the announcement, and are keeping the beleaguered company on their "critical list".
"There are a lot of questions we now want to ask," said Nigel Parsons at Williams de Broe. "There may well be more problems to find within the company and a lot more work to do."
Shares in the company fell 5.5 per cent to close at 25.5p.
A series of accounting errors at the group, formerly known as Airtours, dogged the group last year, compounding the problems brought on by a slump in business following 11 September. It has issued three profits warnings in the past 18 months and now needs to secure a three-year extension on the repayment of £221.6m of convertible bonds, or the rest of its £1.3bn of debt will be called in by the banks.
The deal will give bondholders a 21 per cent stake in the company and an improved annual interest rate of 7 per cent.
The company last week announced that 66 per cent of bondholders had given their support to the refinancing package. But it needs the support of 75 per cent before it can take the deal forward. MyTravel has said that most of its bankers and other creditors have already agreed the terms.
"Kazia took on the role of group finance director at a critical point for the company in November 2002 and has played a vital part in the refinancing that enables us to implement our turnaround plan," said Eric Sanderson, the chairman.
John Darlington will succeed Ms Kantor until a permanent replacement is found. He has been advising the company on its refinancing for the past few months and is known as a turnaround specialist. Mr Darlington has previously advised HP Bulmer.
Ms Kantor, who is a former finance director at Coats Viyella, was earning a basic salary of £380,000, and negotiations are going on over a settlement agreement.
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