Corporate travel giant CWT filed for bankruptcy protection and a court-supervised recapitalisation process in Texas on Thursday night.
One of the world’s leading travel management companies (TMCs), CWT confirmed it would enter a ‘pre-packaged’ Chapter 11 bankruptcy protection process to push through financial restructuring last month.
A hearing was expected today with the pre-packaged bankruptcy procedure expected to be brief after CWT announced it had secured “overwhelming support from financial stakeholders”.
A ‘pre-pack’ bankruptcy involves a restructuring plan agreed with shareholders and creditors in advance of a company declaring insolvency.
The CWT recapitalisation plan will eliminate about half the company’s $1.5 billion debt while providing $350 million in new share capital and provide for all CWT business partners and providers of goods and services to be paid in full.
It will see the Carlson family which has controlled CWT since its creation cede majority ownership to the company’s creditors.
In a statement, CWT said the recapitalisation “has the support of 100% of the company’s bank group and holders of over 90% of the company’s outstanding secured debt”.
The agreement with creditors came after the company defaulted on an interest payment due on a $250 million bond in June.
A CWT spokesman said the company continues to operate as normal. The company, based in Minneapolis, has 15,000 employees.