XL Leisure Group has confirmed it is in talks on refinancing, but declined to comment on reports that it is seeking a cash injection as a matter of urgency.
The UK’s third-largest holiday group, XL Leisure was the subject of a management buy out from Iceland-based Avion in early 2007 and shed 500 jobs last autumn.
In a statement, the company said: “XL Leisure Group has been working on an ongoing refinancing process since the management buy out. The group is engaged with a number of third parties as part of this process.”
The statement acknowledged the current market is “challenging”, but said: “XL Leisure Group is experiencing strong trading, with bookings for 2009 out-performing last year.”
An XL spokesman insisted the group’s cancellation of its winter programme to the Caribbean, announced last week, was unconnected with the refinancing. He said: “There is absolutely no relation between cancelling the Caribbean routes and the statement on restructuring.”
The spokesman said there was also “no connection in any way” between the refinancing talks and the departure of former chairman Peter Owen in June. Owen stood down for personal reasons.
Corporate-restructuring specialist Kroll is known to be working with the company. Reports suggest that Barclays, one of two existing backers – the other is Icelandic group Straumur – withdrew funding for fuel hedging in mid-August.
The spokesman acknowledged the current credit climate will make restructuring more difficult.
XL Leisure Group comprises XL Airways, seat-only operator Freedom Flights, XL.com, XL Holidays, Travel City Direct. Kosmar Holidays and Aspire Holidays.
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