Pardus Capital Arrives at MyTravel

LONDON (HedgeWorld.com)–The tour company MyTravel Group PLC learned of a new passenger on Monday [July 24], when the activist hedge fund Pardus Capital Management LP disclosed a 4.02% acquisition in the company’s shares via its Pardus European Special Opportunities Master Fund LP.

New York-based Pardus, which in January elected a slate of three candidates to the board of Bally Total Fitness, did not comment on its purchase of the MyTravel equity. From the viewpoint of an activist fund, however, the tour operator may be a candidate for a trip to the auction block.

MyTravel, at one time the largest tour company in the United Kingdom, has faced bankruptcy twice in the last three years–at the end of 2003 it reported a ?? 1/2 911 million loss as its debt rose to ?? 1/2 1.3 billion, and in 2004 it completed its financial restructuring through a deal with its banks, exchanging ?? 1/2 800 million in debt for 88% of the company’s equity.

This year MyTravel has seen its stock price drop by 4.5%, though losses for the six month period ended April 30 fell by nearly ?? 1/2 50 million to ?? 1/2 70.3 million. Plans are in place to return to profitability by the end of the year, according to the company, and on July 5 it completed a deal to acquire Encore Cruises, a Canadian distributor of cruise holidays, for approximately ?? 1/2 185 million.

A MyTravel spokesman told AFX News that management was “not stunned” by the Pardus move, and that the company remains focused on its current strategy.