Travelport May Prefer Debt Financing With Blackstone in `No Hurry' to Sell
Travelport Sees Debt Financing ‘Better’ Than IPO
Andrew Harrer/Bloomberg
Travelport postponed a $1.8 billion London initial public offering in February, citing market volatility and uncertainty.
Travelport postponed a $1.8 billion London initial public offering in February, citing market volatility and uncertainty. Photographer: Andrew Harrer/Bloomberg
Travelport Ltd., the travel- reservation systems provider backed by Blackstone Group LP, may seek debt financing rather than revive a plan to sell shares.
“We are not a distressed company,” Gordon Wilson, the company’s deputy chief executive officer, said yesterday in an interview from Langley, England, where the company is based. “We do have debt for renewal in 2012, but the debt market is probably better than equity. We have no compunction to list.”
Travelport postponed a $1.8 billion London initial public offering in February, citing market volatility and uncertainty. The IPO would have been the second biggest in the U.K. this year, trailing only Essar Energy Plc’s $1.9 billion sale, according to data compiled by Bloomberg.
At least 15 European IPOs, including Travelport’s, were delayed or shelved this year as the Greek sovereign debt crisis spurred volatility in equity markets, curbing investors’ appetite for new stocks.
Travelport investors such as Blackstone are in “no hurry” to sell their stakes in the company, Wilson said. “We are not a drain on Blackstone. Travelport has been a hugely successful investment.”
The travel-reservation provider’s revenue rose 3 percent to $1.2 billion in the first half, according to a report on its website. Earnings before interest, taxes, depreciation and amortization remained unchanged at $315 million. The company had $3.35 billion of net debt as of June 30.
Rival’s IPO
Amadeus IT Holding SA, a competitor controlled by private- equity firms BC Partners Ltd. and Cinven Ltd., raised 1.32 billion euros ($1.67 billion) in April. The stock surged 8.2 percent in its Madrid debut and was trading at about 17 percent above its IPO price today.
“Amadeus found a window that opened,” Wilson said. “We have to wait until the market is right. The Greek sovereign debt crisis forced our window to close.”
The benchmark Stoxx Europe 600 Index gained 15 percent from its lowest level in February to this year’s high on April 15, about two weeks before Amadeus went public.
“All options are open” for Travelport including an IPO, said Wilson. While a London listing remains a “good choice” as two of the company’s biggest businesses are based in the U.K., “it isn’t the only market,” Wilson said.
Travelport will probably retain the managers it selected for its potential IPO even if it lists elsewhere, Wilson said. The firm’s postponed share sale would have been managed by Barclays Plc of the U.K., New York-based Citigroup Inc., Deutsche Bank of Frankfurt and Zurich-based Credit Suisse Group AG and UBS AG.
Travelport’s senior bank loans were unchanged at 94.5 percent of face value, according to prices provided by Mizuho Financial Group Inc. The average price for actively traded leveraged loans in Europe was 95.5 percent of face value in the week ended Aug. 12, down 3 basis points from the previous five- day period, according to Standard & Poor’s Leveraged Commentary & Data.
To contact the reporters on this story: Armorel Kenna in Milan at akenna@bloomberg.net; Zijing Wu in London at zwu17@bloomberg.net
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