LONDON Dec 10 Spanish travel company Globalia
has agreed to buy debt-laden peer Orizonia in a deal that will
value the business at 141 million euros ($182 million) after
lenders cut their debt claims substantially, people familiar
with the deal said on Monday.
Orizonia's value has tumbled since private equity firms
Carlyle Group and Vista Capital bought the tour operator
for about 900 million euros in 2006.
The leveraged buyout saddled Orizonia - then known as
Iberostar - with 640 million euros of loans.
For the Globalia deal to go ahead, lenders need to agree by
December 12 to write down the loans to 81 million euros, the
Globalia will inject a total of 60 million euros of new
equity as part of the transaction, trumping a previous offer
from hotel group Barcelo, they added.
Orizonia, which is based in Palma de Mallorca and has about
1,000 offices in Spain and Portugal, declined comment.
The deal also tops a previous offer by fund manager ICG and
Vista Capital, the private equity arm of Spanish bank Santander.
Like other travel companies, such as Thomas Cook,
Orizonia suffered a slump in revenue as the euro zone crisis
intensified and consumers cut back on travel.
To plug a funding gap, the company managed to raise about 35
million euros by selling a 50 percent stake in its online travel
agency Rumbo to Switzerland's Bravofly in November.
As part of Globalia's 60 million euro equity injection, an
initial 15 million euros will be used to buy some of Orizonia's
subsidiaries, the sources said.
On completion of the deal, Globalia will provide an
additional 25 million euros and a further 20 million euros if
"The transaction put forward by Globalia is better for the
company (compared with the Barcelo offer)," one person close to
the deal said, adding that it will stabilise cashflow and make a
significant dent in Orizonia's liquidity shortfall.
The deal will leave 75 million euros of senior five-year
debt claims in place, in addition to 6 million euros of
five-year junior-ranking debt.
($1 = 0.7735 euros)
(Editing by David Goodman)