XL Leisure Group in urgent refinancing talks

The third largest holiday firm Britain, XL Leisure Group, is reporting that it is in urgent talks with lenders after a refinancing plan has been delayed.

The lenders, Barclays and Straumur, of Iceland, are said to be considering options available to them at this time. Sources within the airline industry are indicating that Barclays have recruited the corporate-restructuring group Kroll to advise them. The sources also suggested that the future of XL Leisure could be decided as early as this week.

It is understood that XL Leisure is seeking a new lender following Barclays pulling the financing associated with fuel hedging on 14 August.

In 2006, XL was bought out by management and the company has rapidly grown to be a major player in the UK holiday market – behind TUI Travel and Thomas Cook. Its airline, XL Air-ways, provides service to over 50 destinations, and the company sells package holidays under a wide range of brands that include Freedom Flights, Kosmar, Travel City Direct and XL.com.

Over the weekend, a spokesman for XL Leisure confirmed that “third parties” were engaged in its planned refinancing. “We have no further comment on the specifics of the refinancing. While acknowledging it is a challenging market, the XL Leisure Group is experiencing strong trading, with bookings for 2009 already outperforming last year.”

www.xl.com