- PAR exchanged $49.56 million of Orbitz Worldwide, Inc. senior term debt for 8,141,402 shares of common stock.
- Travelport purchased 9,025,271 shares of Orbitz Worldwide, Inc. common stock for $50 million in cash.
CHICAGO, Jan 28, 2010 /PRNewswire via COMTEX/ -- Orbitz Worldwide, Inc. (NYSE: OWW) today announced that PAR Investment Partners ("PAR") and Travelport each completed their purchases of additional common shares of the Company on January 26, 2010. The share purchases were priced based on the market closing price of the Company's common stock on Tuesday, November 3, 2009, which was $5.54. These purchases received shareholder approval on January 25, 2010.
In connection with these transactions, PAR and Travelport have each exercised their right to appoint a director to the Company's Board of Directors. The appointees will be named at a later date.
"These significant investments in Orbitz by PAR and Travelport demonstrate confidence in our company's strategic direction, operating team and ability to grow the business. These transactions have reduced our debt by $50 million, increased our cash by $50 million and give us additional operating flexibility as we pursue the growth of our global hotel distribution business," said Barney Harford, president and CEO, Orbitz Worldwide. "PAR is a respected investor in the travel sector, and we look forward to their deepened involvement in our business. We also welcome the strong vote of confidence in Orbitz from Travelport and its controlling owner, Blackstone."
Terms of the Transactions
PAR exchanged $49.56 million aggregate principal amount of term loans for 8,141,402 common shares of the Company. In addition, PAR has received the right to appoint one director to the Company's Board of Directors. The Company has retired the debt it received from PAR in accordance with the amendment to its senior secured credit agreement entered into in June 2009.
Travelport, through one of its controlled affiliates, purchased 9,025,271 common shares of the Company for $50 million in cash. After this investment, Travelport owns approximately 48.3 percent of the Company's outstanding common shares. The Company expects that the proceeds from the Travelport transaction will be used for general corporate purposes, which could include additional capital investments and/or further debt reduction.
After the closing of these transactions today, the Company has $527 million of outstanding borrowings under its senior secured credit agreement and cash on the balance sheet has increased by $50 million. The Company currently has 100,998,234 common shares outstanding. Of the shares outstanding, Travelport holds 48,817,419 common shares, The Blackstone Group, which currently controls Travelport, beneficially owns 55,046,598 shares (which includes the shares held by Travelport) and PAR holds 24,605,094 shares.
Houlihan Lokey acted as the financial advisor to a Special Committee of the Company's Board of Directors who evaluated and approved the Travelport transaction. The Special Committee consisted exclusively of independent directors of the Company. Davis Polk & Wardwell LLP served as legal counsel to the Special Committee.
About Orbitz Worldwide
Orbitz Worldwide is a leading global online travel company that uses innovative technology to enable leisure and businesstravelers to research, plan and book a broad range of travel products. Orbitz Worldwide owns a portfolio of consumer brands that includes Orbitz (www.orbitz.com), CheapTickets (www.cheaptickets.com), ebookers (www.ebookers.com), HotelClub (www.hotelclub.com), RatesToGo (www.ratestogo.com), the Away Network (www.away.com), and corporate travel brand Orbitz for Business (www.orbitzforbusiness.com). For more information on how your company can partner with Orbitz Worldwide, visit corp.orbitz.com.
Orbitz Worldwide uses its Investor Relations website to make information available to its investors and the public at www.orbitz-ir.com. You can sign up to receive email alerts whenever the company posts new information to the website.
This press release may contain forward-looking statements that involve risks, uncertainties and other factors concerning, among other things, the Company's expected financial performance and its strategic operational plans. The results presented are unaudited. The Company's actual results could differ materially from the results expressed or implied by such forward-looking statements and reported results should not be considered as an indication of future performance. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, the current economic downturn and global financial crisis; competition in the travel industry; factors affecting the level of travel activity, particularly air travel volume; maintenance and protection of the Company's information technology and intellectual property; the outcome of pending litigation; the Company's significant indebtedness; risks associated with doing business in multiple currencies; trends in the travel industry; and general economic and business conditions. More information regarding these and other risks, uncertainties and factors is contained in the section entitled "Risk Factors" in the Company's filings with the Securities and Exchange Commission ("SEC") which are available on the SEC's website at www.sec.gov or the Company's Investor Relations website at http://orbitz-ir.com. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this press release. All information in this press release is as of January 28, 2010, and the Company undertakes no obligation to publicly revise any forward-looking statement.
SOURCE Orbitz Worldwide, Inc.