Facing $1.5 billion in debt amid an uncertain business travel recovery outlook a few months ago, mega travel management company CWT now is entering 2022 with that debt slashed in half and $350 million in new capital, thanks to a prepackaged Chapter 11 bankruptcy filing that won speedy court approval.
CWT CEO Michelle McKinney Frymire stepped into the thick of it, taking that position in April after serving as CWT’s president and CFO. CWT prepared a prepackaged filing that the TMC said had near-universal support among its financial stakeholders, a process that took “six full months of working with investors on what is the right capital structure, what do we want the balance sheet to look like and how do we get the liquidity to not just recover but to invest in technology tools,” she said at The Beat Live this month. After filing on Nov. 11, CWT received court approval to exit Chapter 11 the next day. McKinney Frymire said the restructuring was crucial to CWT’s long-term survival.
“Every TMC big or small has had to manage through an incredibly difficult period,” she told BTN prior to the announcement of the filing. “We wanted to ensure that even for a multi-year recovery that we had adequate liquidity, that our balance sheet was strong and that we could make the right investments.”
CWT has yet to detail its precise plans for the investment, but it plans to invest about $100 million in product development, including its myCWT travel management platform, and it also plans to expand omnichannel content, travel comparison capabilities, analytics and solutions around sustainability.
The restructuring also meant the end of the family Carlson company as majority shareholder in CWT, which already had rebranded to CWT from Carlson Wagonlit Travel in 2019. McKinney Frymire said the dilution of Carlson control did not signal a shift in company culture. “We have shared values, and we have shared perspective, and they have been a part of the business for a very long time,” she told BTN. “The ownership change is not about changing our strategy or our purpose or our values; it’s about giving us the financial strength to deliver on our strategy and our purpose and our values.”