TMC seeks new arrangements with banks
Carlson Wagonlit Travel (CWT), one of the world biggest travel management companies, is re-negotiating the terms of its loans from banks.
The company has debts dating back to its purchase of rival TMC Navigant in 2006.
Credit ratings agency Standard and Poor's also lowered the TMC's long-term rating from B to B minus.
It said it would review the rating in the next three months.
S&P said the lowered rating reflected its view that the economic downturn "is likely to lead to a severe decline in CWT's free cash flow generation in 2009 and 2010."
CWT, which is owned by Carlson, a US-based group of companies embracing hotels, restaurants, travel companies and marketing, never disclosed how much it paid for Navigant.
The American TMC was one of several purchases made by CWT in a four year spell up to 2006.
These included the Maritz Travel Company in America as well as agencies in France and Germany.
It has since bought further agencies in Austria, Ireland and Canada.
A spokesperson for CWT said: "We have a debt because of our buy out of Navigant in 2006. What is happening is that business travel is down and everyone is feeling it, airlines, hotels, travel management companies.
"We have gone back to our syndicate of lending banks and said ‘Could we have a look at the financial agreements we have with you?'"
The spokesperson said it was a "precautionary measure because we don't know how long this crisis will go on."
She said re-negotiating the agreements would give the TMC "flexibility."
The spokesperson added: "The number of our transactions was down in the first quarter but we are a solid company which is taking the necessary steps to ensure we remain that way.
"When the recession is behind us, we will remain an industry leader."
She said the S&P view was simply the credit rating company's opinion.
www.carlsonwagonlit.com www.standardandpoors.com