USIT under examinership as rescue package pursued

The USIT group has gone into examinership just 12 days after it was bought by its largest rival for a nominal sum. Zurich-based STA Travel has agreed to provide funding and assistance to USIT while the examiner, Mr David Hughes of Ernst Young, tries to reorganise the business.

Mr Hughes's job will be made more difficult by the decision last week of National Irish Bank to appoint a provisional liquidator to the group's treasury operation USIT Ltd. NIB is owed €3.38 million (£2.66 million) by the treasury company which is owed €120 million by the other companies in the USIT group. This debt makes the provisional liquidator Mr Ray Jackson the largest creditor to the examinership.

The High Court heard last week that the USIT group had a deficit in the region of €80 million. Yesterday, the company refused to comment othe extent of its financial difficulties. In a statement it said that the boards of USIT World, Usitworld.com and USIT Now had petitioned the High Court for the appointment of an examiner. This will give the company protection from its creditors while the examiner tries to put together a rescue package or "scheme of arrangement".

STA Travel - which is owned by the Swiss travel group Diethelm Keller Holding - said it had started to provide tickets for USIT Now in order to allow it continue trading as normal. USIT Now is the Irish part of the USIT group which has operations in 66 countries and 1,500 staff based in 200 offices.

STA Travel employs more than 2,000 staff and has in excess of 350 offices. It was started in Australia in 1979 as a travel company aimed at students. Mr Dick Porter, the chief executive officer of STA, said his company had agreed to provide funding to enable the USIT group "to continue normal business operations during the examinerhsip period".