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Tour operator XL Leisure is said to be in crisis talks after key funder Barclays withdrew its backing.

Published: 02 Sep 2008

Tour operator XL Leisure is said to be in crisis talks after key funder Barclays withdrew its backing.

"Soaring oil prices have already seen the company announce the cancellation of all flights to the Caribbean from November. Thousands of holidaymakers who had booked trips through its brands Kosmar, Aspire and Travel City Direct are now awaiting news of a possible refinancing deal with Barclays," reported business.scotsman.com.

As per the information available, the tour operator is hoping to shore up its finances this week after weekend talks with lenders, it was reported.

XL Leisure, which runs XL Airways and sells holidays under brands such as Travel City Direct and Freedom Flights, has been in talks with Barclays and Icelandic investment group Straumur, the Daily Telegraph said. The Gatwick-based group has been impacted by rising oil costs and is trying to refinance its debt burden.

A company spokesman recently said: "While acknowledging it is a challenging market, the XL Leisure Group is experiencing strong trading, with bookings for 2009 already outperforming last year."

It is believed that XL is looking for a new lender after Barclays withdrew financing associated with fuel hedging positions last month.

The group made an operating loss of £24m in its last financial year to October 2007, according to telegraph.co.uk. Figures filed at Companies House revealed that net liabilities increased from £8m to £59m during the period. The money owed to creditors grew from £114m to £205m, added the report.