Thousands of jobs are at risk as the company that owns Travelex teeters on the brink of collapse.
Travelex-owner Finablr (FIN.L) said in a short statement on Tuesday it has “engaged an accounting firm to undertake rapid contingency planning for a potential insolvency.” The appointment comes amid “ongoing” discussions with Finablr’s lenders about the company’s cash position.
A spokesperson for Finablr declined to name the accounting firm, which was only approached on Monday night and has not officially accepted the job. If the firm does accept the work and Finablr cannot secure emergency funding, the company could collapse into administration within days.
Finablr’s collapse would put thousands of jobs at risk. The company employs 18,000 staff around the world. As well as Travelex, Finablr owns other money changing businesses like UAE Exchange and Xpress Money.
Travelex is the biggest part of the business and employed just over 7,600 people globally. The majority — almost 4,000 — are frontline staff who work at Travelex’s bureau du change kiosks at airports, train stations, and shopping centres around the world.
The insolvency warning comes just days after Finablr first revealed it was in trouble. The company said last week that it was facing a “liquidity squeeze” as a result of coronavirus reducing demand for travel money and “adverse perceptions” surrounding NMC Health (NMC.L), a Middle Eastern hospital group with links to Finablr.
Finablr’s co-chairman and largest shareholder Bavaguthu Raghuram Shetty is also the founder of NMC Health. Confusion over the ownership of Shetty’s shares in NMC and the discovery of undisclosed debts of $2.7bn (£2.2bn) plunged the hospital group into crisis.
Accounting problems were also discovered at Finablr on Monday. The company said the board had discovered undisclosed cheques written by the business worth $100m. Corporate investigators Kroll have been appointed to look into the issue and chief executive Promoth Manghat resigned in the wake of the disclosures.
Finablr said on Monday its future was uncertain and it would be unable to provide some currency exchange services as a result of the ongoing issues. Shares were suspended on Monday but have halved since issues were first disclosed.
Finablr only listed on the London Stock Exchange in May 2019 so has yet to file a full annual report. The company processed over 115m transactions worth $115bn in 2018. It operates in over 170 countries and serves millions of retail customers. Travelex also works with major high street banks such as HSBC and Barclays to provide behind-the-scenes money transfer services.
Travelex has had a disastrous 2020. Operations were disrupted for around a month at the start of the year after the company was hit by a cyber attack on New Year’s Eve. The company said earlier this month the incident had cost it millions.
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