Travelex

Travelex is a British foreign exchange company founded by Lloyd Dorfman and headquartered in London. Its main businesses are international payments, foreign currency exchange, issuing prepaid credit cards for use by travellers and global remittance.[4]

Travelex
TypeLimited company
IndustryFinancial Services
Founded1976 (1976)
FounderLloyd Dorfman
Headquarters
London, N1
United Kingdom
Key people
Donald Muir
(CEO)
James Birch
(General Counsel)
ProductsForeign exchange
Revenue£729.5 mil *[1] (2018)
£23.1mil *[1] (2018)
Number of employees
7,627[1] (2018)
5,437[2] (2020)
Websitetravelex-corporate.com
Footnotes / references
* Figures as declared in 2018[3]

History

Travelex was founded by Dorfman and opened its first branch in central London in 1976.[4]

On 8 November 2000, it bought Thomas Cook's worldwide foreign exchange business for £440m, which significantly expanded its international operations.[5]

In February 2005, buy-out firm Apax Partners bought a majority stake in the company, but Dorfman retained 30% and continued to run the business.[6] Ian Meakins was CEO from 2006 to 2009, before becoming CEO of Ferguson plc (then known as Wolseley plc) .[7]

In early 2010, Travelex disclosed significant losses due to the interest payments on its large debts. Later that year it sold its card programme management division to MasterCard for £290 million to help reduce its debts.[8]

Travelex sponsored the National Theatre's discounted ticket scheme between 2003 and 2018.[9] In 2010 Lloyd Dorfman gave the theatre £10m, its biggest ever donation. Following redevelopment in 2013, the Cottesloe Theatre was renamed the Dorfman Theatre.

On 5 July 2011, Travelex sold its Global Business Payments division to Western Union for £606 million.[10]

By March 2014, Travelex had operations in 27 countries and more than 1,500 stores.[11]

In 2014, Apax Partners sold its majority stake of 51% to UAE-based Indian businessman B. R. Shetty valuing the company at approx £1bn. Shetty also owned UAE Exchange, a UAE-based money transfer business. The acquisition was supported by Abu Dhabi-based investment vehicle Centurion and completed in January 2015.[12][13]

In May 2019, Travelex, UAE Exchange and a number of other financial service businesses operated by B. R. Shetty were placed into a holding company called Finablr, prior to an IPO on the London Stock Exchange that took place on 15 May that year.[14]

Mid 2019, Finablr began co-branding the businesses within its estate.

On 5 May 2020, despite remaining a Finablr-owned business at that time, the co-branding of the chain introduced in mid-2019 was removed from its online presence.

On 26 May 2020, Travelex announced a wave of immediate redundancies citing the Coronavirus pandemic.[15] The situation was likely to have been severely impacted also by its own issues within the group including, but not limited, to the cyberattack of 31 Dec 2019 and serious fraud allegations at its then-parent, Finablr. At the time, CEO Tony D'Souza said:

"While we remain unsure about what the future holds for Travelex, we know that we need to do everything we can in order to give the business the best chance of long-term viability. Sadly, this means that we anticipate that there will be a reduction in the number of roles and therefore employees, from several teams across our global business"

Many colleagues across Travelex globally were made redundant on 30 June 2020, and this seems to have gone largely unreported.

On 15 June 2020, Travelex announced that it had terminated its attempt to sell itself, the action having been originally announced by the business on 13 May 2020.[16]

On 30 June 2020, on the day they had been due, Travelex announced that it would be delaying the publication of its FY 2019 accounts. The business stated that its delayed completion of financial statements was owing to the cyberattack and implications of COVID-19.[17]

On 1 July 2020, Travelex ceased its international money transfer services in the UK and abroad, it had formerly carried the branding 'Travelex Wire'.[18]

On 6 August 2020, the business collapsed into administration[19] with PwC being appointed to multiple subsidiaries within the business that day. PwC later announced that a so-called "pre-pack" administration deal had been reached, with the company being taken over by a consortium of its creditors.[20] The deal resulted in the majority of its UK store estate closing with immediate effect and 1,309 UK redunancies.[21]

Cyberattack and ransom demands

On 31 December 2019, Travelex took its UK and international websites and mobile apps offline following a reported cyberattack,[22] an action that also affected a number of large corporate third parties to whom Travelex provided a white-labelled travel money service,[23] including the online travel money services of supermarket chains such as ASDA, Tesco and Sainsbury's.[24][25]

On 7 January 2020, it was revealed that the company was being held to ransom by hackers. The hackers demanded payment in exchange for either restoration of IT systems or the preservation of customer data. It was understood that a deadline of seven days payment was set by the cyber criminals.[26] The company was criticised by security researcher Kevin Beaumont who said, "The public response from Travelex has been shockingly bad."[27] As of 12 January 2020, the services remained offline.[28]

The cyber criminals demanded £4.6 million ($6 million) in ransom from Travelex after infecting its network with Sodinokibi ransomware, having claimed to have copied more than 5GB of customer personal data. Travelex had previously been warned that it was running vulnerable Pulse Secure virtual private networking (VPN) servers.[29][30][28]

On 13 January 2020, the company issued a formal statement on the resumption of services and promised that a "recovery road map" would be issued later in the week. It stated that the business had continued to trade throughout January, with in-store services and ATMs available and stated that there had been no evidence of loss of customer data.[31][32]

Despite the gradual restoration of services taking place, white-labelled online travel money services remained offline beyond 13 January.[33]

On 16 January 2020, the company announced that it had managed to restore the automated order placement used by several UK high street banks and that it would relaunch its international money transfer service by the end of the month.[34]

On 17 January 2020, boss Tony D'Souza said, in a video message on a back-up website, that the IT system used by in-store staff was working again. There was no statement on when the firm's main UK or international consumer websites or mobile apps would be returned to service.[35]

As of early February 2020, a number of the company's own websites including its main consumer website,[36] and a number of its banking partners remained offline,[37][38][39][40][41][42][43] and no further updates had been offered, with some of its commercial partners apparently considering their options.[44] Meanwhile, the company's Australian and United Arab Emirates websites display errors.[45][46]

On 9 April 2020, it was reported that Travelex had paid the cyberattack ransom fee of $2.3 million to the hackers in order to restore their systems. While paying the ransomware fee may have restored the Travelex network, for those whose data was potentially compromised, remain in limbo and no detail of this possible data breach has been made available.[47][48]

Finablr difficulties

On 12 March 2020, Finablr, of which Travelex was then a part, announced that it was taking steps to assess accurately its current liquidity and cashflow position,[49] with shares trading at circa 7 pence, down 97% from 11 December 2019 when their value peaked at 215 pence.[50]

On 16 March 2020, Finablr was suspended from the London Stock Exchange as it announced it was in danger of collapse having identified circa $100m (£81m) of undisclosed financing, which meant it no longer had any certainty over its financial position. Simultaneously, Promoth Manghat, Group CEO left the business.[51] The business also stated that it was no longer able to provide certain payment processing services, however failed to address what services this entailed. Administrators Kroll were appointed to carry out an independent investigation into its finances.[52]

On 16 March 2020, then-sister business UAE Exchange suspended all new transactions citing "certain operational challenges" in an emailed statement.[53]

On 17 March 2020, Finablr announced that it has engaged an accountancy firm to undertake rapid contingency planning for a potential insolvency appointment,[54] with administration likely later in the week.[55]

On 18 March 2020, Finablr announced that its UAE Exchange division had been taken over by the Central Bank of the United Arab Emirates with immediate effect. The Central Bank also stated that it had commenced an examination of the business in order to verify its compliance with laws and regulations in the region.[56]

On 29 March 2020, EY (Ernst & Young) resigned as auditor of Finablr citing a number of concerns relating to board composition and financial governance.[57]

On 9 April 2020, shares in Finablr were suspended from the London Stock Exchange. The business announced the resignation of Promoth Manghat as chief executive with immediate effect as well as the appointments of administrators Kroll and Houlihan Lokey to carry out an independent investigation into group finances. Among other localised authorities the UK's Financial Conduct Authority and the Central Bank of the United Arab Emirates are also investigating the business's finances.[58]

On 22 April 2020, Travelex announced that it had placed itself up for sale with immediate effect and was working with administrators PwC on the sale process in an attempt to extract itself from the wider group. The business stated that it had "communicated this intention to Finablr".[59][60]

During April 2020, most global operations of Finablr were suspended in their entirety with Travelex being an exception continuing to provide a basic service. The group's other fascias UAE Exchange, Xpress Money, TimesofMoney, Remit2India, Unimoni and Ditto (which had ceased previously) all displyed suspension notices on their respective websites:

"[division name] is temporarily unavailable for undertaking transactions. We regret the inconvenience and thank you for your understanding and cooperation as we endeavour to restore the service"

On 30 April 2020, Finablr announced previously-undeclared debts of around $1.3 billion had been identified by Houlihan Lokey and Kroll as part of their investigations, adding that it:

"cannot exclude the possibility that some of the proceeds of these borrowings may have been used for purposes outside of the Finablr Group"

[61][62]

On 6 August 2020, following the its collapse into administration and its "pre-pack" sale, Travelex is no longer a Finablr subsidiary.

Administration

On 6 August 2020 administrators PwC announced that a so-called "pre-pack" administration deal had been reached,[19] with the company being taken over by a consortium of its creditors.[20] The deal provided £84m of new funding, reduced the business's debt and safeguarded 1,802 UK jobs and a further 3,635 globally. However, it added "Unfortunately, as the majority of the UK retail business is no longer able to continue trading, it has regrettably resulted in 1,309 UK employees being made redundant today".[21][63]

The acquiring of Travelex by its creditors went on to split the remaining business into two parts; OldCo and NewCo, together "New Travelex". It confirmed its intention to actively continue a number of components within the group including Africa, Asia, ATMs, Brazil, Middle East, outsourcing and wholesale; but also to place under review (and retain in administration) other formerly-core areas of the remaining business including but not limited to its business in North America, as well as European stores and UK stores.[64]

Subsidiaries
  • Autobahn-Raststatte Basel Nord AG
  • Confidence Corretora de Cambio S.A.
  • Confidence Corretora de Cambio SA
  • Confidence Turismo S.A.
  • Fort Lauderdale Business & Currency LLC
  • Newark Currency Services LLC
  • Pittsburgh Currency Services LLC
  • RDU Currency & Business LLC
  • Renova Serviços
  • South American Cards Services Administradora De Cartoes S.A.
  • TIHUM Tecnologica Limitada
  • Tourvest Financial Services (Pty) Limited
  • Travelex & Co. LLC
  • Travelex (Thailand) Limited
  • Travelex Acquisitionco Limited
  • Travelex Africa Foreign Exchange (Pty) Limited
  • Travelex Agency Services Limited
  • Travelex America Holdings Inc.
  • Travelex America Inc.
  • Travelex Ankara Doviz Ticaret Yetkili Muessese AS
  • Travelex Ankara Doviz Ticareti A.S.
  • Travelex Assessoria em Câmbio e Serviços Auxiliares
  • Travelex Australia Holdings Pty Limited
  • Travelex Bahrain WLL
  • Travelex Banco de Cambio SA
  • Travelex Banknotes Limited (in administration)[19]
  • Travelex Canada Limited
  • Travelex Card Services Limited HK
  • Travelex Card Services Limited UK
  • Travelex Central Services Limited
  • Travelex Cloud Services Limited
  • Travelex Currency Exchange & Payments Sdn Bhd
  • Travelex Currency Services Inc.
  • Travelex Currency Services Limited
  • Travelex Czech Republic AS
  • Travelex Deutschland GmbH
  • Travelex Deutschland Limited
  • Travelex Do Brasil Holding Financeira Ltda
  • Travelex Do Brasil Holding Nao Financeira Ltda
  • Travelex Doviz Ticaret Anonim Sirketi
  • Travelex Doviz Ticaret Yetkili Muessese AS
  • Travelex Emirates Exchange LLC
  • Travelex Emirates LLC
  • Travelex Europe Limited
  • Travelex Financial Services Limited
  • Travelex Financial Services NZ Limited
  • Travelex Financing PLC (in administration)[65]
  • Travelex Foreign Coin Services Limited
  • Travelex Global And Financial Services Limited
  • Travelex Group Investments Limited (in administration)[19]
  • Travelex Group Limited (in administration)[19]
  • Travelex Holding (HK) Limited
  • Travelex Holding (S) Pte Limited
  • Travelex Holdings (S) Pte Limited
  • Travelex Holdings Limited (in administration)[19]
  • Travelex India Private Limited
  • Travelex Issuerco Limited
  • Travelex Italia Limited
  • Travelex Italia Srl
  • Travelex Japan KK
  • Travelex Limited (in administration)[19]
  • Travelex Limited (Australia)
  • Travelex N.V.
  • Travelex Nigeria Business Solutions Limited
  • Travelex NV
  • Travelex NY Inc.
  • Travelex Panama S.A.
  • Travelex Qatar
  • Travelex Qatar QSC
  • Travelex Retail Nigeria Limited
  • Travelex SA / NV
  • Travelex Switzerland AG
  • Travelex Topco Limited
  • Travelex UK Limited (in administration)[19]
  • Travellers Exchange Corporation Limited

[66]

References
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  2. https://www.bbc.co.uk/news/business-53684484
  3. Simeon Kerr (30 April 2020). "Finablr says debt may be 4 times higher than reported". Financial Times London. Archived from the original on 1 May 2020. Retrieved 30 April 2020.
  4. Travelex Group information on official website, accessed 5 November 2012. Archived 19 August 2010 at the Wayback Machine
  5. The Telegraph (9 November 2000). "Thomas Cook cheques arm sold for £440m". Retrieved 12 January 2020.
  6. "Travelex boss sells £260m stake". The Guardian. February 28, 2005. Retrieved February 1, 2011.
  7. Richard Blackden (23 May 2009). "Travelex founder takes charge again". The Telegraph. Retrieved 8 May 2018.
  8. Wilson, Harry (9 December 2010). "MasterCard buys Travelex division for £290m". London: The Telegraph.
  9. Brown, Mark "National Theatre's Cottesloe venue to be renamed after £10m donor" The Guardian 28 October 2010. Retrieved 7 December 2010.
  10. "Western Union to Acquire Travelex Global Business Payments". Businesswire. July 5, 2011.
  11. Travelex. "Travelex Corporate Presentation" (PDF). 2014-03. Retrieved 2014-07-14.
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  14. "UAE's Finablr slumps below IPO price in London market debut". Reuters. 15 May 2019. Retrieved 3 September 2019.
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  20. "Travelex completes debt restructuring". PwC. 6 August 2020.
  21. "Travelex falls into administration, with loss of 1,300 jobs". The Guardian. 6 August 2020.
  22. "Travelex site taken offline after cyber attack". BBC News. Jan 2, 2020.
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  24. ""Travel Money - Exchange Rate" (Archived from the original on 11/01/20". Sainsbury's Bank. Archived from the original on 11 January 2020. Retrieved 11 January 2020.
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  34. Travelex to relaunch some foreign money exchange after weeks-long blackout | News Shopper
  35. Travelex boss breaks silence 17 days after cyber attack - BBC News
  36. Travelex.com
  37. Travelex: Bank currency services still offline after hack
  38. Barclays Travel Money | Homepage
  39. HSBC Travel Money | Homepage
  40. NatWest Travel Money | Homepage
  41. Sainsbury's Bank Travel Money | Homepage
  42. Tesco Bank Travel Money | Homepage
  43. Virgin Travel Money | Homepage
  44. Banks shun Travelex as cyber-attack jitters linger | The Times
  45. Travelex Australia | 502 Error
  46. Travelex United Arab Emirates | Not Secure
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  54. "potential insolvency appointment" – via londonstockexchange.com.
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  66. "Completion of debt restructuring". travelex-corporate.com.
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