Hays Travel takes minority equity stake in Ocean Holidays

Hays Travel has taken a 35% equity stake in Ocean Holidays in a move centred on the repayment of convertible loan notes totalling about £10 million including interest.

 

The deal was struck as a result of Ocean Holidays’ membership of the Hays Travel Independence Group, which it joined at the end of last year after more than two decades with the Travel Trust Association.

 

Ocean Holidays co-founder and co-chief executive Harry Hastings said: “We no longer have any external debt, which is good news because it allows us to reinvest our profits into our number-one priority, which is the trade. That’s where we’re seeing our biggest opportunity for growth.”

 

The US specialist operator accepted £7.5 million in convertible loan notes in August 2023 from a “syndicate of high-net-worth and corporate partners” following a period of losses throughout the pandemic and during the delayed reopening of the US market.

 

The 36-month financial instrument would have been converted into equity in August next year, paid back or renegotiated.

 

Hastings said: “The interest was accruing at quite a high rate and it was better for the business and our trade clients to find a way to remove the convertible loan notes from the balance sheet as quickly as possible.”

 

He added: “We looked at various options to do that and Hays ended up being the most natural way, given our membership of Hays IG.”

 

Hays Travel will not have an operational role in the running of Ocean Holidays, Hastings said. 

 

The agency’s rights will be those of a minority shareholder, while the other minority shareholder group – which supplied the convertible loan notes and £1 million in equity – has had its stake reduced from about 4% to about 2.5%, Hastings added.

 

Hays Travel chief operating officer Jonathon Woodall-Johnston said: “Our investment will help Ocean Holidays stabilise and develop as a business. We are committed to helping businesses in our consortia grow and succeed.”

 

Ocean Holidays, whose brands are Ocean Florida, Ocean Beds and Winged Boots, had recorded strong booking figures in the past year, Hastings said.

 

“We’re [now] trading better than we’ve ever done and on a current trading basis we’re more profitable than ever,” he added.