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Flight Centre raises capital to manage COVID-19 disruption
Allen & Overy has advised Flight Centre Travel Group on $200 million of bilateral facilities to help the company navigate the challenges facing Australia’s tourism sector.
Tony Zhang
Firms: Allen & Overy (Flight Centre Travel Group)
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Deal: Allen & Overy has advised Flight Centre Travel Group Limited (Flight Centre), Australia’s largest travel agent, in respect of an additional $200 million of bilateral facilities, with the loan proceeds to be used to ensure Flight Centre has the necessary liquidity to manage the business through the significant disruption to the global travel industry caused by the COVID-19 pandemic.
Value: $200 million.
Area: Capital raise, private equity.
Key players: The Allen & Overy team assisting Flight Centre comprised Sydney partners James Abbott and Adam Stapledon with senior associate, Victoria Eriksson and lawyers, Alexandra Ioppolo and Alissa Lucas.
Deal significance: In total, Flight Centre has secured $900 million in fresh equity and debt to help it survive the coronavirus crisis.
King & Wood Mallesons had acted for Flight Centre on its $700 million entitlement offer and institutional placement.
The additional bilateral facilities are being provided by Flight Centre’s existing lenders.
Together with Flight Centre’s equity capital raising and its cost reduction and cash preservation measures, the additional facilities will enable Flight Centre to continue to trade through this period and deliver its travel services to corporate and leisure customers, both in Australia and in its global operations across 23 countries.
Mr Abbott, Allen & Overy partner commented: “Flight Centre is a leader in the travel industry in Australia and globally. These additional facilities will assist the business to steer through the immediate term challenges facing the tourism sector.”
"We’re very pleased to continue to support Flight Centre as it navigates this difficult period.”
Earlier in April, Flight Centre Travel Group announced it will close 428 Australian stores by the end of July, or roughly 40 per cent of its network.
Managing director Graham Turner said, “It is – without question – the most challenging period we have encountered in over 30 years in business and it is inevitable that some businesses across our industry will fail.”
