CWT Memo 160221
- Understand the likelihood of a second restructuring at CWT, the potential new money need, how a second restructuring might be implemented and what IRR prospects might be for providers of new money in a second restructuring as well as recovery prospects for CWT’s Existing 1L New Money Notes (NMNs), 2L Senior Secured Notes (SSNs) and 3L Senior Notes (SNs)
- Understand who might be interested in acquiring CWT and why
- Understand components of business travel spend, which components may be impaired on a longer term basis following the COVID-19 shock, survey-based data points on business travel prospects going forward, our projections for global business travel spend and what these mean for CWT’s financial performance going forward as compared to its Jul-20 first restructuring plan projections
- Understand the competitive position of business travel management companies (TMCs) vs online travel agencies (OTAs) and direct booking with travel suppliers
- Restructuring analysis – US Ch. 11; new money need and feasibility of attracting this based on potential IRRs on DIP financing; recovery rates across CWT’s capital structure
- Financial projections (including of liquidity) across 3 scenarios
- Historic M&A transactions multiples for business TMCs
- Projections for global business travel spending by component over 2020 – 2030
- Financial and operational comparison of the major business TMCs with which CWT competes, including relative cost structure analysis
- Who would be interested in acquiring CWT should an attractive entry price arise and how well positioned are they to do so?
- How likely is Carlson to continue to provide new money to CWT and what is its capacity to do so? How much has it net invested in CWT over many years?
- What do surveys of corporate travel managers travel spend plans tell us about the extent to which, and pace with which, business travel will recover?
- What structural pressures did CWT and other business TMCs already face pre-COVID and how well (and how) were they managing them? What competitive advantages do TMCs have over OTAs and direct booking with travel suppliers?
- How have per transaction unit economics been evolving for CWT?
- Which components of business travel may be impaired over the long term following the COVID-19 shock? To what extent are Zoom, Microsoft Teams and other videoconferencing services substituting for business travel since COVID and how much of this is temporary vs permanent?
- How does global business travel spend break down between TMCs, OTAs and direct booking, what is the market share of each of the major TMCs and how has their market share been developing?
- What are the prospects for business travel growth in China and how well positioned is CWT in China?
- How has Amex Global Business Travel (GBT) been able to gain market share vs CWT and how well positioned is Amex GBT to handle the COVID challenge vs CWT?
- View, Variant Perception & Recommendations
Business Overview & Analysis
Historic Financials Analysis
How Well Will Business Travel Recover?
Financial Projections – Scenarios #1 - #3
American Express Global Business Travel
Internova Travel Group