MyTravel clinches debt deal

Ailing British tour operator MyTravel has struck a deal with creditors which will defer some of its debt repayments.

The company said a group of bondholders had agreed in principle to extend the maturity on some of its debt by three years, to January 2007.

The agreement means that MyTravel will not have to repay the full value of the bonds until three years later than originally planned.

The deal, which follows a hard-won renegotiation of its bank debt two months ago, will help relieve some of the pressure on MyTravel's finances.

The company, formerly known as Airtours, has been hit hard by the global tourism slump triggered by fears over terrorist attacks, war in Iraq, and the deadly SARS virus.

The travel industry downturn struck just as the firm had expanded in an effort to boost its market share.

The firm was also rocked by a sharp fall in its share price last year after it admitted that accounting irregularities had led it to overstate its profits.

MyTravel on Friday confirmed that travel industry conditions remained tough, saying a weaker than expected performance in the US and Scandinavia would keep second half operating profits flat.

The company had previously forecast that brisk summer trading would boost profits in the second half of the year.

MyTravel shares were down 4.5p at 28.5p in early trade in the City.