Travelex owner Finablr on brink of collapse as it appoints insolvency firm

Travelex on the brink ( PA Archive/PA Images )

The under-fire owner of currency business Travelex today moved to the brink of collapse as it appointed an insolvency firm.

Finablr, which employs 18,000 staff including around 7,000 at Travelex, said the decision was taken as it was running out of cash, adding that discussions with lenders had failed to provide any clear solutions.

The company has been listed in London for less than a year.

It said: “The board of Finablr has engaged an accounting firm to undertake rapid contingency planning for a potential insolvency appointment with a view to maximising value in the group.”

Despite the bleak outlook the Travelex owner said that it was hoping to find a solution, including a possible sale.

Yesterday a fund owned by Abu Dhabi state investor Mubadala bought a 3.4% stake, sparking talk that it might buy the firm outright. The stake was purchased by MIC Capital Partners, owned and managed by Mubadala Capital.

However, a spokesman added that no formal talks had taken place and that the future remains “uncertain”.

The move to appoint an insolvency firm comes after the company announced yesterday that it had discovered £80 million of undisclosed cheques that were written before the company’s IPO in early 2019.

Its chief executive, Promoth Manghat, resigned and corporate investigations firm and administrator Kroll was brought in to look in-depth at the company’s finances.

Finablr stock has been battered in recent months, mostly because of its ties to troubled hospitals operator NMC Health, which has the same founder, Bavaguthu Shetty.

Travelex itself has also been significantly impacted by a cyberattack that took place over New Years Eve 2019 which saw much of its international operations impacted both online and in branch. Some Travelex partners remain offline even today; including HSBC, FirstDirect, Virgin Money and Sainsbury’s all still currently unable to offer online foreign exchange services.

Sainsbury's bank travel money travelex hacked
The website of Sainsbury’s Bank states that their online currency ordering FX service is currently unavailable

Yesterday, Travelex’s sister company within Finablr, UAE Exchange, which trades in some countries as “Unimoni” suspended all new transactions citing “operational challenges”, with a number of customers taking to the company’s social media channels to complain of delays with existing transfers and orders.

US short-seller Muddy Waters criticised NMC Health in a report over the company’s accounting and leadership practices, and the Financial Conduct Authority is investigating the situation. Some of the issues with NMC involve financing arrangements that weren’t disclosed to its board, the firm said.

Finablr appears to have almost identical issues.

Governance specialist PIRC said the Finablr and NMC Health scandal was “a historic financial and governance failure”.

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