XL Leisure Hopes to Shore Up Finances Soon

Tour operator XL Leisure is said to be in crisis talks after key funder Barclays withdrew its backing. Thousands of holidaymakers who had booked trips through its brands Kosmar, Aspire and Travel City Direct are now awaiting news of a possible refinancing deal with Barclays, reported business.scotsman.com.

XL Leisure, which runs XL Airways and sells holidays under brands such as Travel City Direct and Freedom Flights, has been in talks with Barclays and Icelandic investment group Straumur, the Daily Telegraph said. The Gatwick-based group has been impacted by rising oil costs and is trying to refinance its debt burden.

A company spokesman recently said that “while acknowledging it is a challenging market, the XL Leisure Group is experiencing strong trading, with bookings for 2009 already outperforming last year.”

It is believed that XL is looking for a new lender after Barclays withdrew financing associated with fuel hedging positions last month.

The group made an operating loss of £24 million in its last financial year to October 2007, according to telegraph.co.uk. Figures filed at Companies House revealed that net liabilities increased from £8 million to £59 million during the period. The money owed to creditors grew from £114 million to £205 million, added the report.