World News

Travelex shuts UK forex bureaus on virus fears, starts funding talks

(Reuters) – Foreign exchange company Travelex said on Friday it was shutting its UK bureaus for about eight weeks or more due to the coronavirus pandemic and that it was in talks with its stakeholders for continued access to funds.

The company, owned by UK-listed Finablr <FINF.L>, said it was also in the process of creating an independent board to avoid any overlap with its troubled parent and allay shareholder concerns.

Travelex provides forex services for customers of HSBC <HSBA.L>, Barclays <BARC.L>, Virgin Money <VMUK.L> and the banking arms of British retailers Tesco <TSCO.L> and Sainsbury <SBRY.L> through its automated order placement service.

The company was also a target of a ransomware attack in late December and had estimated a hit of 25 million pounds ($30.54 million) to its first-quarter underlying core earnings.

However, it was planning to offset some of the hit with a claim under its cyber-insurance policy.

“The timing of EBITDA recognition and receipt of the insurance recovery is yet to be determined,” the company said. “The outbreak of COVID 19 … is likely to worsen the position.”

The company also said it was unlikely to provide its annual financial statements by the April 30 deadline imposed by the terms of senior secured notes and the revolving credit facility.

It plans to use the grace period to seek waiver or other arrangements from its lenders and noteholders.

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Shounak Dasgupta and Anil D’Silva)