Waiting for its IPO window of opportunity, Travelport apparently is mulling some debt financing.
Deputy CEO Gordon Wilson told Bloomberg that owner Blackstone Group is in no hurry to off-load Travelport and that it may seek debt financing because the debt market is probably more attractive at this juncture than the IPO market.
Curiously, within a few hours of the story appearing, Bloomberg changed the original headline to distance it from Wilson, and Travelport declined to comment any further.
With the Greek financial crisis as a backdrop, Travelport in February withdrew its IPO attempt in London and apparently today its owners are mulling all their exit-strategy options.
This is all a far cry from the heady days of 2007 when all the talk centered around Blackstone cashing in on its 2006 acquisition of Travelport for $4.3 billion in lightning-quick fashion.
Unlike in an earlier era when private equity firms had to sit on their investments and wait years for a payday, Blackstone investors recouped a portion of their Travelport outlay in March 2007. Under the arrangement, Travelport took out a $1.1 billion “payment-in kind loan” just seven months after the acquisition, with all of the proceeds going to Blackstone and other private equity stockholders.
The transaction, of course, was a windfall for investors, but saddled Travelport with more debt.
Of Blackstone’s prospects, a Travelport official said in March 2007 that the PIK loan set the stage for the investors’ exist within a year to 18 months.
Today, with the IPO market in a fickle state, to say the least, Blackstone, in considering going the debt-financing route, could be mulling having Travelport issue another special dividend to investors, similar to the 2007 transaction, according to one analyst.
A dividend would be one option, among several probably under consideration.
So, debt financing would be sort of a holding action as Blackstone waits for the IPO market to right itself.
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