Welcome Break, the UK's second-biggest motorway service station owner, yesterday parted company with its finance director just days after dropping plans for a major refinancing.
The company, which is backed by the private-equity group Investcorp, said Ian Harris had left with "immediate effect". It has appointed a former executive from MyTravel, the embattled holiday company, as his replacement.
George Charters, the chief executive, denied suggestions that Mr Harris's resignation was linked to disagreements between the company and its bondholders over the aborted refinancing. "We clearly reached a time when we could review our executive structure, we have done that and chosen to part company," he said.
Welcome Break, which formed part of the great Forte asset sell-off when it was acquired by Investcorp six years ago in a highly leveraged deal, owns 24 motorway service stations across the country. Speculation about the company's future has raged since it was hit by a credit rerating from Standard & Poor's last summer.
Although debt holders ordered the group to explore options for a refinancing earlier this year, Mr Charters insisted yesterday that the company had "no immediate cash flow problems". It toyed with a £300m sale and leaseback of nine of its outlets to raise enough money to be able to redeem some of its bonds, but the plans, which would have seen its bondholders take a significant hit, were rejected.
Although the company had hinted earlier this month that the failure to refinance would compromise its liquidity, Mr Charters denied that a "crisis point" was looming. "There is no immediate dire need to surrender any bonds," he said. Despite the setback, the company said it would "review ways to improve its financial position for the long-term".
Welcome Break's decision to securitise revenues from its motorway service areas in a £376m deal predated the securitisation trend among pub companies such as Punch Taverns. But stiff competition, which has seen Compass, the catering giant, pump money into revamping its service stations, has put the company's sales under pressure, stymieing its repayment schedules.
The Bahrain-based Investcorp injected £15m into Welcome Break last year to redevelop its sites in a move that saw it open several new Kentucky Fried Chicken outlets and expand its coffee bar chain.
Nick Wright, 46, MyTravel's former UK finance director, takes over from Mr Harris. He previously spent 17 years working for Whitbread, the leisure group.
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