Travel Agents

Helloworld launches $50m equity raising

Huntley Mitchell

Huntley Mitchell

Helloworld Travel has launched a fully underwritten equity raising of approximately $50 million to help it manage the prolonged period of disruption to the global travel industry due to the COVID-19 pandemic.

The equity raising comprises an institutional placement and an entitlement offer, which will result in the issue of 30.303 million new fully-paid ordinary shares in Helloworld, representing approximately 24.3 per cent of existing shares on issue.

Each new share issued under the placement and the entitlement offer will rank equally with existing shares on issue, according to the company.

With travel restrictions still in place domestically and internationally, Helloworld expects these to last through the remainder of 2020 and into 2021.

As a result, the company expects total transaction value (TTV) to remain at 10 to 12 per cent of previous levels until September 2020, and then progressively increase as state borders and potential trans-Tasman travel ‘bubbles’ open.

Helloworld noted that its mix of domestic and international leisure travel, corporate travel and wholesale travel businesses were positioned to benefit from a recovery in 2021 and 2022.

“The company is already seeing an increase in domestic air and land bookings, aligned to planned capacity increases by the domestic carriers,” it said in an update to shareholders.

“The company’s corporate business, which comprises 70 per cent domestic TTV, is increasing week by week as borders restrictions have eased.”

Following completion of the equity raising, the company said it will have sufficient liquidity for operating and capital expenditure through to the end of 2022 assuming ongoing disruption caused by COVID-19.

Helloworld revealed that its net cash operating costs progressively reduced to roughly $2 million per month (net of JobKeeper in Australia and the Wage Subsidy in New Zealand) from late March 2020, and discretionary variable expenditure reduced to near nil from April.

“Material cost reductions, including those from landlords and suppliers, will be sustained over the balance of 2020,” it said.

The company recently closed its offices in Manila and Mumbai and offloaded its US wholesale operation to Down Under Answers, a well-established travel wholesaler based in Seattle.

Helloworld said it was also assisting retail travel agents and brokers in its Australian and New Zealand to “manage their way through this challenging period until demand returns”, including suspending all franchise and marketing fees from 1 April 2020 to 31 March 2021.

“We are working with the retail networks to promote available destinations with a wide range of domestic products now in market,” the company added.

“To date, approximately five per cent of franchisees have elected to close.”

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Aviation

Is former Virgin CEO Paul Scurrah set to fly back to Rex?

by Huntley Mitchell

Paul Scurrah has been laying low since exiting Virgin late last year, but the speculation wheel has started to turn around his next role.

Share

CommentComments

Travel Agents

“We need to address the elephant in the room”: travel agent implores government to make ‘that announcement’

by Linda Forster

An Aussie agent has waxed poetic about the travel industry’s struggles in this impassioned plea for the government to stop turning a blind eye.

Share

CommentComments

Cruise

Ponant appoints BDM for New South Wales and the ACT

The luxe cruise line has hired a new local BDM … as in a business development manager, not a basketball dunking master or a bad decision-maker.

Share

CommentComments

Aviation

Will you accept this flight? Stood-down Jetstar pilot becomes Australia’s new Bachelor

by Ali Coulton

After having his career put on hold by COVID-19, this super-handsome, self-professed romantic took the obvious course of action and became Australia’s newest Bachelor!

Share

CommentComments

Destinations

Australia takes out Tripadvisor award for world’s best beach

Your clients don’t need to travel internationally to check out this year’s winner, which is a relief, because they’d be waiting a while to visit if it was overseas.

Share

CommentComments

Events

MTA agents flock to the Gold Coast for long-awaited Virtuoso event

After a few false starts, the team at MTA have finally got their hands on the latest in luxury travel intel from Virtuoso.

Share

CommentComments

Travel Agents

Collapse of Helloworld agencies prompt urgent warning from business restructuring expert

Struggling travel companies are being urged to seek help before JobKeeper is wound back.

Share

CommentComments

Aviation

Flight forced to perform emergency landing after cat attacks pilot

Plane passengers have been left bemused and a bit ticked off after pilots were forced to turn their flight around due to a ferocious feline.

Share

CommentComments

Destinations

Hamish Blake and Zoe Foster-Blake return for Tourism Australia’s latest marketing push

Australia’s fave power couple are back to promote the country’s domestic tourism greatness.

Share

CommentComments

Tourism

STUDY: 86 per cent of Aussies back the ‘vaccine passport’

It looks like most of us are ready and raring to pack up our suitcases and jump on the next plane out of here.

Share

CommentComments

Cruise

Carnival is selling its very own cruise-themed Monopoly game

Unfortunately, even the mere mention of Monopoly is banned in the Travel Weekly office after “the incident”.

Share

CommentComments

Hotels

IHG outlines decade-long plan for sustainable tourism

Raise your KeepCup in delight at the hotel giant’s new spate of commitments to sustainable travel.

Share

CommentComments